Question 1

During the first month of its release, a book in kindle used to cost $5.00. After increasing the price by 1% amazon observed a decline in its revenue. This implies that:

Group of answer choices

At a price of $5.00 the price elasticity of supply is smaller than one

At a price of $5.00 the price elasticity of demand is larger than one

At a price of $5.00 the price elasticity of supply is larger than one

At a price of $5.00 the price elasticity of demand is less than one

Question 2

The government has imposed a price ceiling of $10.00 in the market for vaccines. After such regulation, we observe no changes in the amount of vaccines being traded in the economy. We can conclude that:

Group of answer choices

Setting a price ceiling of $10.00 is equivalent to imposing a price floor of $10.00 in this market

The price-ceiling is below the equilibrium price

The equilibrium price is below $10.00

Imposing such a price ceiling generates a deadweight loss

Question 3

Assume a competitive market with a downward sloping demand and an upward sloping supply. When a tax is imposed, the higher the price elasticity of demand

Group of answer choices

nothing changes regarding the burden of the tax faced by consumers

the higher burden of the tax faced by consumers

the lower burden of the tax faced by consumers

there is not enough information to solve this answer

Question 4

The market for used books is characterized by a demand given by Qd=360-5P and a supply curve given by Qs= 10. The government imposes a sales tax of $10.00 on the market for used books. Which of the following is true:

Group of answer choices

Consumers are facing all the burden of the tax

There is no deadweight loss in the market

The amount of books traded in the market is reduced after the introduction of the tax

The tax revenue is equal to $90.00

Question 5

The consumer is choosing an optimal bundle of goods. Consider the indifference curve (a regular curved one) on which this bundle lies, which of the following is NOT true?

Group of answer choices

It is tangent to the budget line when the consumer is buying some of both goods

Its slope is the MRS

The slope tells us the opportunity cost of one good in terms of the other

When income decreases the consumer cannot consume a bundle on this indifference curve anymore