what is the absolute value of the price elasticity

what is the absolute value of the price elasticity

Subject: Economics    / General Economics
Question
Econ HW2 1) For the next 6 questions, use the graph above. USING THE MIDPOINT METHOD, what is the absolute value of the price elasticity of demand between P=100 and P=80? 0.3333
0.5
0.75
1
1.5
2
2.5
3
3.5
2) The value found in the above question is considered to be: elastic
unit elastic
inelastic
3) Suppose that at this point, producers raised the price by 5%. What would happen to quantity demanded as a result? it would rise by 5%
it would fall by 5%
it would rise by more than 5% Econ HW2 it would fall by more than 5%
it would rise by less than 5%
it would fall by less than 5%
4) USING THE MIDPOINT METHOD, what is the absolute value of the price elasticity of demand between P=40 and P=20? 0.3333
0.5
0.75
1
1.5
2
2.5
3
3.5
5) The value found in the above question is considered to be: elastic
unit elastic
inelastic 6) Suppose that at this point, producers raised the price by 5%. What would happen to quantity demanded as a result? it would rise by 5%
it would fall by 5%
it would rise by more than 5%
it would fall by more than 5%
it would rise by less than 5%
it would fall by less than 5% Econ HW2 7) Use the graph to answer the following questions. Elasticity values are greater than 1 (in absolute value) in the portion of the graph described by letter _____. a
b
c
8) Elasticity values are less than 1 (in absolute value) in the portion of the graph described by letter _____. a
b
c
9) Elasticity values are exactly equal to 1 in absolute value in the portion of the graph described by letter _____. a
b
c
10) The inelastic portion of the graph is the area described by letter _____. a
b
c Econ HW2 11) The unit elastic portion of the graph is the area described by letter _____. a
b
c
12) The elastic portion of the graph is the area described by letter _____. a
b
c
13) Total revenue is maximized over the portion of the graph described by letter ______. a
b
c
14) Suppose we are somewhere in portion “c” on the graph and the firm raises the price of the good by a small amount. What happens to total revenue? Total revenue will increase
Total revenue will decrease
Total revenue will stay the same 15) Suppose we are somewhere in portion “a” on the graph and the firm raises the price of the good by a small amount. What happens to total revenue? Total revenue will increase
Total revenue will decrease
Total revenue will stay the same Econ HW2
16) Suppose that the firm lowered prices by 2%, and in response, consumers purchased 6% more of the good. We know that we are somewhere on the portion labeled by letter _________. a
b
c
not enough information to answer
17) For the next 5 questions, consider the following market for Blu­Ray players.
Demand: Qd = 400 – 3P
Supply: Qs = –100 + 2P
Given these equations, what are the equilibrium price and quantity?
Equilibrium price is Equilibrium quantity is 18) Suppose the actual market price of Blu­Ray players is $92. What is the quantity demanded and quantity supplied at this price?
Quantity demanded is Quantity supplied is 19) At this price of $92, will there be a shortage or a surplus of Blu­Ray players? Shortage
Surplus 20) What is the amount of this shortage or surplus? Econ HW2
The shortage or surplus is Blu­Ray players. 21) Over time, do you expect the price of Blu­Ray players to rise or fall? expect the price to rise
expect the price to fall
22) For the next 5 questions, consider the following market for digital cameras.
Demand: Qd = 500 – 2P
Supply: Qs = –80 + 3P
Given these equations, what are the equilibrium price and quantity?
Equilibrium price is Equilibrium quantity is 23) Suppose the actual market price of digital cameras is $128. What is the quantity demanded and quantity supplied at this price?
Quantity demanded is Quantity supplied is 24) At this price of $128, will there be a shortage or a surplus of digital cameras? Shortage
Surplus
25) What is the amount of this shortage or surplus? Econ HW2
The shortage or surplus is digital cameras. 26) Over time, do you expect the price of digital cameras to rise or fall? expect the price to rise
expect the price to fall 27) Suppose guitars and guitar strings are complements in consumption. What will happen in the
market for guitars if the price of guitar strings decreases? There will be an increase in quantity demanded for guitars
There will be a decrease in quantity demanded for guitars
There will be an increase in demand for guitars
There will be a decrease in demand for guitars
28) Based on your answer, what will happen to the equilibrium price of guitars? increase
decrease
remain the same
could do any of the above
29) What will happen to the equilibrium quantity of guitars? increase
decrease
remain the same
could do any of the above
30) Consider another good, bread. Which of the following would cause a leftward shift in the demand for bread? an increase in the production costs involved in making bread
a decrease in consumer income, assuming that bread is a normal good
an increase in consumer income, assuming that bread is a normal good Econ HW2 a decrease in the price of jelly, which is a complement to bread