The price of a plane ride rises by 10 percent. The price elasticity of demand for plane rides is 0.5 and the price elasticity of demand for train rides is 0.2. The cross elasticity of demand for train rides with respect to the price of a plane ride is 0.4. What are the percentage changes in the quantity demanded of plane rides and train rides? E) If the price of a plane ride rises by 10 percent, the percentage change in the quantity demanded of plane rides is a decrease of D percent. Ifthe price of a plane ride rises by 10 percent, the percentage change in the quantity demanded of train rides is an increase of D percent. The figure shows the supply curve of lead. What is the price elasticity of supply between points A and B? Between these two points is supply elastic or inelastic? Between points A and B, the elasticity of supply is , so the supply of lead is Q A. 0.6; elastic Q B. 0.6; inelastic Q C. 1.8; inelastic ( JD. 1.8; elastic 8.00 Price (dollars per ton) 7.00 ,9 Vi 6.00 5.00 4.00 3.00 2.00 1 .00 0.00 1 2 3 4 5 6 Quantity (millions of tons per month) 7 eBay saves billions for bidders On eBay, the bidder who places the highest bid wins the auction and pays only what the second highest bidder offered. Researchers Wolfgang Jank and Galit Shmueli reported that purchasers on eBay in 2003 paid $7 billion less than their winning bids. Because each bid shows the buyer's willingness to pay, winners receive a consumer surplus, estimated at an average of $4 or more. Source: Information Week, January 28, 2008 Does the seller receive a producer surplus? Are auctions on eBay efficient? In an eBay auction, the seller O A. receives a producer surplus if the price he receives exceeds the marginal cost of producing the good O B. receives a consumer surplus if the price he receives is greater than the value he places on the good O C. receives a consumer surplus if the price he receives equals the value he places on the good O D. receives a producer surplus if the price he receives equals the marginal cost of producing the good O E. does not receive a producer surplus Auctions on ebay are because O A. efficient; auctions are always efficient O B. inefficient; marginal cost is equal to the second highest bid O C. inefficient; price is equal to the second highest bid O D. inefficient; marginal benefit is equal to the second highest bid O E. efficient; the quantity sold is determined by equating marginal benefit and marginal cost