Y5

6. Grant's utility function is U(x, y) = 4x+ 10y. The price of x is $4 and the price of y is $15. Grant has $150 a week to spend on x and y. Grant is offered a chance to join a club of y consumers. If he joins, he can get y at a price of $10. What is the most that Yoram would be willing to pay to join the club?

a. Nothing

b.$50 a week

c.$75 a week

d.$30 a week

e. None of the other answers.

Question 7

Frodo's Pizzeria faces a demand function D(p), for which the revenue-maximizing price is $14. The demand function is altered to 1.5D(p). What is the new revenue-maximizing price?

Select one:

a.$21

b. There is insufficient information to determine this.

c.$14

d. none of the other answers.

e.$9.33

Question 8

A kilogram is 2.2 pounds. If the price elasticity of demand for oranges is -0.22 when oranges are measured in pounds, what will be price elasticity of demand for oranges when measured in kilograms?

a.-0.484.

b.-0.22.

c.-0.10.

d. none of the other answers.

e.-0.44.

Question 9

At the price of $100, tourists demand 260 airplane tickets. At the same price, business travelers demand 240. At the price $110, tourists demand 120 tickets and business travelers demand 130. Assuming that the demand curves of business travelers and tourists are both linear over this price range, what is the price elasticity of demand at the price $100?

a.-5.00

b.-25

c.-0.20

d. none of the other answers.

e.-4.75