THE NEXT TWO (2) QUESTIONS ARE BASED ON THE FOLLOWING GRAPH: Price A A C P. B D Q2 Quantity 11. The total revenue at Pa is represented by area(s): (1) B +D (2) C+D (3) A +B (4) D-C 12. Assuming that the demand at P1 is unit elastic, what can be said of the demand at P2? (1) It is elastic. (2) It is inelastic. (3) It is unit elastic. (4) There is not enough information to say anything about price elasticity of demand. 13. Suppose the price elasticity of demand for basketballs is 1.20. A 15% increase in price will result in: (1) a 15% decrease in the quantity of basketballs demanded. (2) an 8% reduction in the number of basketballs demanded. (3) an 18% decrease in the quantity of basketballs demanded. (4) a 12.5% reduction in the number of basketballs demanded.THE NEXT TWO (2) QUESTIONS ARE BASED ON THE FOLLOWTNG GRAPH: p 14. Which of the demand curves is most inelastic at point A? (1) D3 (2) D2 (3) D: [4) All of the above are equally elastic at point A. 15. A decrease in price would result in the largest increase in total revenue on which demand curve. (1) D3 (2) D: (3) D2 (4) It is impossible to answer the quesiicm with the information given. THE NEXT QUESTION IS BASED ON THE FOLLOWING GRAPH: Price A $10 S 8 + - C 6 B A 2 0 100 150 200 250 300 Quantity 16. What is the price elasticity of supply from point A to point C, using the midpoint method? (1) 0.38 (2) 0.75 (3) 1.33 (4) 2.67THE NEXT TWO (2) QUESTIONS ARE BASED ON THE FOLLOWING GRAPH: L7". 18. P S. g? S: 0 mum suppl}r curve is least elastic? [1) S: [2) S: [3) 31 [4) It is impossible to tell without more informtion. mum suppl},r we is most likely the long-run supplyr we? ['1] S: [2) S: [3) 31 [4) All of the above are equally likely to be the long-run supply curve. TI- -' N *XT TWO (2) QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION: In W the price elasticity of demand. and price elasticity of supply are both relatively inelastic (elasticity is less than 1). Whas dozens of independent coffee shops that are small enough that they do not affect each other's prices. Due to the opening of a new coffee bean processing plant, the amount of coffee that each of the coffee shops in [avatown can produce has increased. 19. What will happen to the price of coffee in Wand the coffee shops' revenues due to the supply increase? {1} Price will decrease and revenue will decrease. {2) Price will not change and revenue will increase. {3) Price will decrease and revenue will remain the same. [4} Price will increase and revenue will decrease 20. Suppose Ioe 9mg owns a coffee shop in Wand he calculates his coffee shop is operating at capacity and cannot produce more coffee, despite the new processing plant. If Joe does not increase his production, what will happen to the price of coffee at his coffee shop and his coffee shop's revenues? {1) Price will increase and revenue will decrease. [2} Price will not change and revenue will remain the same. {3 Price will decrease and revenue will decrease. {4) Price will decrease and revenue will remain the same