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Macroeconomic Questions

1. Remembering that demand elasticity is defined as the percentage change in quantity divided by the percentage change in price, if price decreases and, in percentage terms, quantity rises more than the price has dropped, total revenue will a) decrease b) increase c) remain the same d) either increase or decrease e) nothin

Price Elasticity

You are the only pharmacist in a small town; the next closest drugstore is 50 miles away. The population in your town consists of young farmers and older retired families. You have noticed that the young farmers are less sensitive to price changes than the retired population. Specifically, you have found that the working popu

Elasticity Concept

Government imposes excise taxes on goods that have inelastic demand, such a cigarettes, more often than in other cases. Why? Explain using the elasticity concept.

Competitive Market and Price

Why is it that for sellers in a purely competitive market, the price received for each item equals the marginal revenue, while for sellers in imperfectly competitive markets the price received for their product is greater than the marginal revenue?

Effects of Economy on Industry - Airlines

Select an industry that is affected by the economy. "Airline" Research how a current or past event in the industry has caused shifts with the price elasticity of supply and demand. Summarize your research. Research whether the industry produces public goods or private goods, and whether or not the goods are common resou

Sales - Demand Elasticity

2. The Inquiry Club at Jefferson University has compiled a book which exposes the sordid private lives of many of the professors on campus. Economics majors in the club estimate total revenue from sales of the book is given by the equation: TR = 120Q -0.1Q³ a. Over what range of sales is demand elastic? b. Initially, th

Point Income Elasticity/Point Cross Elasticity

5. The McNight company is a major producer of steel. Management estimates that the demand for the company's steel is given by the equation: Qs=5,000-1000Ps + 0.1I + 100 Pa Where Qs is steel demand in thousands of tons per year, Ps is the price of steel in dollars per pound, I is income per capita, and Pa is the price of alu

Cross Elasticity

3. Acme Tobacco is currently selling 5,000 pounds of pipe tobacco per year. Due to competitive pressures, the average price of a pipe declines from $15 to $12. As a result, the demand for Acme pipe tobacco increases to 6,000 pounds per year. a. What is the cross elasticity of demand for pipes and pipe tobacco? b. Assuming t

Cost Schedules & Elasticity

9. Suppose that the firm's cost function is given in the following schedule (where Q is the level of output). Output Q (units) Total Cost 0 7 1 25 2 37 3 45 4 50 5 53 6 58 7 66 8 78 9 96 10 124 Determine the: (a) Marginal cost schedule (b) Total cost schedule 11. The British Automob

Managerial Economics

1. Which of the following statements concerning marginal utility is (are) true? a. marginal utility measures the satisfaction the individual receives from a given incremental change in wealth b. marginal utility is given by the reciprocal of the slope c. a and b d. none of the above 2. Identify the reasons why the qua

Intermediate Economics

1. Money demand in an economy in which no interest is paid on money is M^d / P = 500 + 0.2Y - 1000i. a) Suppose that P = 100, Y = 1000, and i = 0.10. Find real money demand, nominal money demand, and velocity. b) The price level doubles from P = 100 to P = 200. Find real money demand, nominal money demand, and velocit

How construction is affected by the economy

In terms of home building and the construction industry, discuss how a current/past event has resulted in a change in price elasticity of supply and demand. Does it make public goods or common resources? In this industry, is price elasticity of demand though of as elastic or inelastic? Are there any available substitutes?

Various microeconomic problems

1. Inelastic demand means: a. the percentage change in price exceeds the percentage change in quantity purchased. b. this good would be a poor choice for taxation. c. the change in price divided by the change in quantity is less than one. d. the good is a necessity. 2. Prices for artificial flowers have fallen by 10 perc

What is the elasticity of demand given the price and income combination?

The demand for eggs is estimated by x=10000+.00002I - 2000px where px is the price of eggs i is the mean income of the area in thousands Initially, i =50,000 and px =3.00 What is the elasticity of demand given the price and income combination? Suppose the price goes up to $4, using consumers surplus, estimate the we

Demand Curves

Draw out multiple demand graphs and identify and explain and affect on quantity and price: 1) Elastic Demand Curve, 2) Perfectly Inelastic Demand Curve, 3) Perfectly Elastic Demand Curve, and 4) Unit Elasticity.

Interpret regression

Have this regression with the following results: y Coef. Std. Err. t P>t [95% Conf. Interval] age -.0313208 .0048588 -6.45 0.000 -.0408444 -.0217972 age2 .0005537 .0000652 8.50 0.000 .000426 .0006815 black -.9694474 .0396784 -24.43 0.000 -1.04722 -.8916744 female .4468672 .0279172 16.01 0.000 .3921472 .5015872

Homework Practice Quiz Help

Question 1 (1 point) Why does asymmetric information limit contracts from solving incentive conflicts? a. Because of unequal information, it is difficult and costly for parties to ascertain whether or not other parties to the agreement have honored the terms of the contract. b. All parties share in the same i

Problem Set

1. What is a demand for a productive resource, which is derived from the demand for the goods and services produced from that resource. 2. The elasticity of demand for labor depends on ? 3. List the key factors that have changed the supply of labor and that over the years have increased it. 4. Wages and employment have

Firm Costs and Response to Input Price Changes For a firm facing a constant returns to scale Cobb-Douglas production, derive the total cost function for the firm, Calculate the elasticity of total cost with respect to output for the firm, and illustrate the effect of the increase in the wage on labor utilization

Question 2: Firm Costs and Response to Input Price Changes Suppose a firm faces a constant returns to scale Cobb-Douglas production of the form: 2.1 Derive the total cost function for the firm, and calculate the total cost of producing 10,000 units of the output. 2.2 Calculate the elasticity of total cost with resp

Elasticity problem

1) Aksala Manufacturing has estimated the following demand curve for its colored ice cube product: (see chart in attached file) where log P is the natural log of the price, log Q is the natural log of quantity sold, and log Y is the natural log of income. a) What is the price elasticity of demand? On question 1, note

Economics and management

8. Opportunity cost is best defined as A. the amount given up when choosing one activity over all other alternatives B. the amount given up when choosing one activity over the next best alternative C. the opportunity to earn a profit that is greater than the one currently being made D. the amount that is given up when

Problem Set

1. You are given the following individual demand information that represents the demand for typing by students at a local college: Price per page Tom George Lisa Market $1.00 20 30 7 ____ $1.50 15 26 6 ____ $2.00 12 22 5 ____ $2.50 9 20 3 ____ $3.00 7 18 2 ____ $3.50 5 15 1 ____ $4.00 3 10 0 _

Economics - demand estimation

See attached file for full problem description. Homework help - Economics Company Inc, sells TV satellite dishes and has been in business for number of years. The firm's owner has become concerned about the firm's pricing, advertising, and other competitive strategies. He hired a consulting firm to estimate that demand

Economics and Management

6. The sensitivity of the change in quantity demanded to a change in price is called A. income elasticity B. cross-elasticity C. price elasticity of demand D. coefficient of elasticity 7. Two goods are ____________ if the quantity consumed of one increases when the price of the the oth

Economics and Management

To reduce imports of foreign oil, it has been proposed that the United States impose a substantial tax on gasoline. However, it is well known that the short-run elasticity of demand for gasoline is very low. What will happen to the total quantity of gasoline sold if there is an additional gasoline tax? Would the tax be effect