I don't need explant, just the result

18. Refer to the following table to answer the question. A local government is looking to reduce "undesirable" behavior on the part of its citizens: drinking alcoholic beverages and smoking. Assuming people cannot shop for alcoholic beverages out of town, a 10 percent sin tax would have the largest proportionate effect on the sale of:

Cigarettes .3

Liquor .5

Wine .4

Beer .1

Multiple Choice

A. liquor.

B. wine.

C. cigarettes.

D. beer.

12. Economists have estimated the following transportation elasticities. For each pair, explain possible reasons why the elasticities differ. a. Elasticity of demand for buses is 0.23 during peak hours and 0.42 during off-peak hours. multiple choice 1

A. Peak-hour travelers are likely to be commuters who ride the bus because they know it is cheaper and faster than having to drive and park their own car and therefore have lower demand elasticity than those riding buses during off-peak hours who are more likely using buses for errands or other more discretionary activities.

B. Peak-hour travelers are likely to be commuters who buy long-term train passes and therefore have lower demand elasticity than those riding buses during off-peak hours who are more likely using buses only occasionally for errands or other more discretionary activities.

C. These relative elasticities of demand are simply a coincidence; there is no real reason why elasticity should be lower during peak hours than during off-peak hours.

D. Peak-hour travelers are likely to be commuters who have little choice but to go to work and therefore have lower demand elasticity than those riding buses during off-peak hours who are more likely using buses for errands or other more discretionary activities.

b. Elasticity of demand for buses is 0.7 in the short run and 1.5 in the long run. multiple choice 2

A. Demand tends to be less elastic in the short run because there are fewer substitutes. If fares rose enough, in the long run, people could find alternative modes of transportation.

B. Demand tends to be more elastic in the short run because there are more substitutes. If fares rise enough, in the short run, people can find alternative modes of transportation.

C. Demand tends to be less elastic in the short run because there are more substitutes. If fares rose enough, in the short run, people can find alternative modes of transportation.

D. These relative elasticities of demand are simply a coincidence; there is no real reason why elasticity should be lower in the short run than in the long run.

10. If consumers won't pay more than 59 cents for a pack of gum and at 59 cents they will buy an almost infinite amount, price elasticity of demand at 59 cents is:

Multiple Choice

A. perfectly inelastic.

B. perfectly elastic.

C. elastic.

D. inelastic.

7. When tolls on the Dulles Airport Greenway were increased from $1.25 to $2.75, traffic decreased from 24,500 to 14,500 trips a day. Assuming all changes in quantity were due to the change in price, what is the price elasticity of demand for the Dulles Airport Greenway? Instructions: Enter your response rounded to two decimal places. Remember that price elasticity of demand is expressed as a positive number. Do not include a negative sign (-) in your response. Price elasticity of demand: _______

8. The demand for a good is elastic. Which of the following would be the most likely explanation for this?

Multiple Choice

A. The good costs a large portion of one's total income.

B. The time interval considered is short.

C. The good is broadly defined.

D. The good is a necessity.

9. Determine the price elasticity of demand if, in response to a decrease in price of 35 percent, quantity demanded increases by 40 percent. Instructions: Enter your response rounded to one decimal place. Price elasticity of demand: _______ Is demand elastic or inelastic?

Demand is:

A. inelastic

B. elastic