When does an increase in revenue follow from a price increase?

a.never

b.when the product is an inferior good

c.when supply is elastic

d.when demand is inelastic

5 points

QUESTION 2The demand for margarine is quite price sensitive.Which of the following contributesto its demand being so elastic?

a.Margarine is a broad market category that encompasses several specific brands and products.

b.Margarine purchases are a small fraction of any consumer's total spending.

c.The amount of margarine producesmake cannot change quickly in response to price movements.

d.Margarine has close substitutes, namely shortening and butter.

5 points

QUESTION 3Suppose the cross-price elasticity of portable hard drives on cloud-based storage was 0.38.How are portable hard drives and cloud-based storage related?

a.portable hard drives and cloud-based storage are unrelated goods

b.portable hard drives and cloud-based storage are substitutes

c.portable hard drives and cloud-based storage are both normal goods

d.portable hard drives and cloud-based storage are complements

5 points

QUESTION 4The income elasticity of rice in Pakistan is estimated as -0.251.If incomes in Pakistan increase, what does the model of supply and demand predict for the rice market?

a.a decrease in rice consumption and decrease in price

b.a decrease in rice consumption and increase in price

c.an increase in rice consumption and decrease in price

d.an increase in rice consumption and increase in price

5 points

QUESTION 5If a binding price floor were placed on a competitive market, which of the following wouldnotresult?

a.an excess or surplus

b.an increase in quantity traded

c.a decline in quantity demanded

d.anincrease in the price producersreceive

4 points

QUESTION 6Suppose the gate fee at a national park increases from $25 to $35 while no other variables change.In consequence, the daily quantity of visitors decreases from 3,200 to 2,800.Calculate the absolute value of the price elasticity of demandfor this price range (using the average price and quantity).

Answers must be within 0.01 of the true value to be counted as correct.The answer will be a positive number.

4 points

QUESTION 7Demand is described by P=21-0.03Q+0.001A, where A is the industry-wide spending on advertising. Supply is described by P=7+0.01Q. Calculate the equilibrium quantity if A=10,000.

Answers must be within 1.0 of the actual value to be counted as correct. Do not include spaces or plus signs.

3 points

QUESTION 8Demand is described by P=21-0.03Q+0.001A, where A is the industry-wide spending on advertising. Supply is described by P=7+0.01Q. Calculate the equilibrium price if A=10,000.

Answers must be within 0.2 of the actual value to be counted as correct.Do not include spaces, dollar signs, or plus signs.

3 points

QUESTION 9Demand is described by P=21-0.03Q+0.001A, where A is the industry-wide spending on advertising. Supply is described by P=7+0.01Q. Calculate the equilibrium quantity if adveristing is cut to 2000 (A=2000).

Answers must be within 1.0 of the actual value to be counted as correct. Do not include spaces or plus signs.

3 points

QUESTION 10Demand is described by P=21-0.03Q+0.001A, where A is the industry-wide spending on advertising. Supply is described by P=7+0.01Q. Calculate the equilibrium price if A=2000.

Answers must be within 0.2 of the actual value to be counted as correct.Do not include spaces, dollar signs, or plus signs.