Assume that Abby, Ben, Clara, Joe, and Matt are the only citizens in a community. A proposed public good has a total cost of $500. All five citizens will share an equal portion of this cost in taxes. The benefit of the publi good is $220 to Abby, $210 to Ben, $190 to Clara, $180 to Joe, and $120 to Matt. In a majority vote, this proposal will most likely be Multiple Choice eBook accepted, all 5 in favor. O accepted, four in favor, one against. O defeated, all 5 against. O defeated, 2 in favor, 3 against.2 The price elasticity of demand for widgets is 1.2. Assuming no change in the demand curve for widgets, an increase in sales of 15 percent implies a(n) Multiple Choice eBook O 13.8 percent reduction in price. 18 percent reduction in price. O 12.5 percent reduction in price. O 10.5 percent reduction in price.3 Answer the question based on the following information for four highway programs of increasing scope. All figures are in millions of dollars. Program Total Cost Total Benefit A $ 2 $ 9 B 6 16 C 12 21 D 20 23 eBook Based on the data, we can say that the marginal costs of Program B are Multiple Choice $10. O $6. O $16. O $4.4 The supply of product X is perfectly inelastic if the price of X rises by Multiple Choice eBook O 2 percent and quantity supplied rises by 3 percent. O 10 percent and quantity supplied rises by 10 percent. 6 percent and quantity supplied stays the same. O 12 percent and quantity supplied rises by 10 percent.5 The elasticity of supply of product X is unitary if the price of X rises by Multiple Choice eBook O 2 percent and quantity supplied rises by 3 percent. 10 percent and quantity supplied rises by 10 percent. O 6 percent and quantity supplied stays the same. O 12 percent and quantity supplied rises by 10 percent.6 Assume that a 9 percent increase in income across the economy produces a 6 percent decrease in the quantity demanded of good X. The coefficient of income elasticity of demand is Multiple Choice eBook O positive, and therefore X is a normal good. O negative, and therefore X is a normal good. positive, and therefore X is an inferior good. O negative, and therefore X is an inferior good.7 Suppose that Mick and Cher are the only two members of society and are willing to pay $10 and $8, respectively, for the third unit of a public good. Also, assume that the marginal cost of the third unit is $17. We can conclude that Multiple Cho eBook O the third unit should be produced. 4 units should be produced. O zero units should be produced. O the third unit should not be produced.8 $6.30 $5.70 - -. eBook D2 D1 O Q 188 212 384 416 Refer to the diagram and assume a single good. If the price of the good increased from $5.70 to $6.30 along D1, the price elasticity of demand along this portion of the demand curve would be Multiple Choice 0.8. O 1 . O 1.2. O 29 If a firm finds that it can sell $20,000 worth of a product when its price is $6 per unit and $22,000 worth of it when its price is $5, then Multiple Choice eBook O the demand for the product is elastic in the $5-$6 price range. O the demand for the product must have increased. elasticity of demand is 0.66. O the demand for the product is inelastic in the $5-$6 price range
