Question 1

Whats defention of terms:
-law of supply

Accepted Answer

The answer of Whats defention of terms:
-law of supply...

Question 2

Assume a move theater owner wants to raise more revenue from ticket sales. What should the theater owner due if the price elasticity of demand for his tickets is elastic?

Accepted Answer

A)  the theater owner should raise ticket prices in order to collect more from each customer. 
B)  the theater owner should lower ticket prices in order to increase the number of customers. 
C)  the theater owner should keep ticket prices the same, because he won't be able to increase sales. 
D)  It depends on what movie is currently showing at the theater.

Question 3

$\text { Table 27b }$
$\begin{array}{ccc}
\hline\text { Price } & \text { Quantity Supplied in } & \text { Quantity Supplied in } \
&\text { January } & \text { February }\
\hline \$ 35,000 & 55,000 & 60,000 \
\hline \$ 30,000 & 50,000 & 55,000 \
\hline \$ 25,000 & 45,000 & 50,000 \
\hline \$ 20,000 & 40,000 & 45,000 \
\hline \$ 15,000 & 35,000 & 40,000\
\hline
\end{array}$
-Assume Table 27a represents supply schedules for Ford Explorers. What might account for the difference between the January supply schedule and the February supply schedule?

Accepted Answer

A)  an increase in consumer income 
B)  a decrease in wages paid to Ford factory workers. 
C)  a decrease in consumer income. 
D)  an increase in the cost of glass used for windows in Ford Explorers.

Question 4

Understand and describe what happens when a market is not in equilibrium.
-Explain why all downward-sloping linear demand curves have elastic, inelastic, and unitary elastic regions.

Accepted Answer

The answer of Understand and describe what happens when a...

Question 5

$\text { Table } 27 \text { a }$
$\begin{array}{ccc}
\hline\text {Price}&\text { Quantity Demanded}&\text { Quantity Demanded}\
&\text { in January}& \text {in February}\
\hline \$ 35,000 & 35,000 & 40,000 \
\hline \$ 30,000 & 40,000 & 45,000 \
\hline \$ 25,000 & 45,000 & 50,000 \
\hline \$ 20,000 & 50,000 & 55,000 \
\hline \$ 15,000 & 55,000 & 60,000 \
\hline
\end{array}$

-Assume Table 27b represents supply schedules for Ford Explorers. In January Ford Motor Company would have been willing to supply 55,000 cars at a price of $35,000 and 40,000 cars at a price of $20,000. This change from $35,000 to $20,000 represents

Accepted Answer

A)  an increase in supply. 
B)  an increase in quantity supplied. 
C)  an decrease in supply. 
D)  a decrease in quantity supplied.

Question 6

Define cross-price elasticity and show how it is used to define necessity and luxury goods.
-What is cross-price elasticity? What is the formula for calculating cross-price elasticity?

Accepted Answer

The answer of Define cross-price elasticity and show how it...

Question 7

Understand and describe what happens when a market is not in equilibrium.
-Carefully distinguish between a change in supply and a change in the quantity ?supplied.

Accepted Answer

The answer of Understand and describe what happens when a...

Question 8

Whats defention of terms:
-elastic demand

Accepted Answer

The answer of Whats defention of terms:
-elastic demand...

Question 9

Whats defention of terms:
-change in quantity demanded

Accepted Answer

The answer of Whats defention of terms:
-change in quantity demanded...

Question 10

A good with an income elasticity less than one is

Accepted Answer

A)  a necessity good. 
B)  a luxury good. 
C)  an inferior good. 
D)  a normal good.

Question 11

Whats defention of terms:
-normal goods

Accepted Answer

The answer of Whats defention of terms:
-normal goods...

Question 12

Whats defention of terms:
-supply

Accepted Answer

The answer of Whats defention of terms:
-supply...

Question 13

Explain the progressive critiques of supply and demand analysis.
-What happens to supply and demand analysis if the government intervenes in the market?

Accepted Answer

The answer of Explain the progressive critiques of supply and...

Question 14

Understand and describe what happens when a market is not in equilibrium.
-How is price elasticity of demand calculated? Why do we use absolute values for price elasticity of demand?

Accepted Answer

The answer of Understand and describe what happens when a...

Question 15

Explain the limitations of elasticity (demand, supply, income, and cross-price).
-Explain the "identification problem."

Accepted Answer

The answer of Explain the limitations of elasticity (demand, supply,...

Question 16

Understand and describe what happens when a market is not in equilibrium.
-How are total revenue and price elasticity of demand related?

Accepted Answer

The answer of Understand and describe what happens when a...

Question 17

A good with an income elasticity greater than one is

Accepted Answer

A)  a necessity good. 
B)  a luxury good. 
C)  an inferior good. 
D)  a normal good.

Question 18

Which of the following factors may influence the demand for coffee sold in fast food restaurants?

Accepted Answer

A)  the cost of coffee beans used to make the coffee. 
B)  the income of consumers shopping in fast food restaurants. 
C)  the wages paid to workers in fast food restaurants. 
D)  the weather during the growing season in Brazil (where the coffee is grown).

Question 19

Define equilibrium and explain what it means.
-What is equilibrium? Why is it such an important concept?

Accepted Answer

The answer of Define equilibrium and explain what it means.
-What...

Question 20

The owner of a movie theater found that when he raised ticket prices 10%, he sold 20% more tickets. What is the price elasticity of demand?

Accepted Answer

A)  0.5 
B)  2.0 
C)  10 
D)  20

Exam 27: Simple Analytics of Supply and Demand

Whats defention of terms: -law of supply

Assume a move theater owner wants to raise more revenue from ticket sales. What should the theater owner due if the price elasticity of demand for his tickets is elastic?

Understand and describe what happens when a market is not in equilibrium. -Explain why all downward-sloping linear demand curves have elastic, inelastic, and unitary elastic regions.

Define cross-price elasticity and show how it is used to define necessity and luxury goods. -What is cross-price elasticity? What is the formula for calculating cross-price elasticity?

Understand and describe what happens when a market is not in equilibrium. -Carefully distinguish between a change in supply and a change in the quantity ?supplied.

Whats defention of terms: -elastic demand

Whats defention of terms: -change in quantity demanded

A good with an income elasticity less than one is

Whats defention of terms: -normal goods

Whats defention of terms: -supply

Explain the progressive critiques of supply and demand analysis. -What happens to supply and demand analysis if the government intervenes in the market?

Understand and describe what happens when a market is not in equilibrium. -How is price elasticity of demand calculated? Why do we use absolute values for price elasticity of demand?

Explain the limitations of elasticity (demand, supply, income, and cross-price). -Explain the "identification problem."

Understand and describe what happens when a market is not in equilibrium. -How are total revenue and price elasticity of demand related?

A good with an income elasticity greater than one is

Which of the following factors may influence the demand for coffee sold in fast food restaurants?

Define equilibrium and explain what it means. -What is equilibrium? Why is it such an important concept?

The owner of a movie theater found that when he raised ticket prices 10%, he sold 20% more tickets. What is the price elasticity of demand?