Econ Answers Chapter 3
Econ Answers Chapter 3
The price of train travel increases by 10% and the demand for train travel falls by 12.5%. The price elasticity of demand for train travel is – -1.25
The short run (retail) supply of freshly cut flowers is much less elastic than that of pot plants because: -florists cannot keep freshly cut flowers as long as pot plants
If demand drops to zero at the slightest increase in price, demand is: - Perfectly elastic
Price elasticity of supply will be greater when: - firms hold large stocks., some time has passed., firms have spare capacity.
If total revenue increases after a price increase, demand – inelastic
If your income increased by 10% and the quantity of pizza you demanded increased by 5%, your income elasticity of demand for pizza is: - 0.5
Price elasticity of demand is the - ratio of the percentage change in quantity demanded to the percentage change in price
If the cross-price elasticity of demand between two goods is negative, then the goods are – complements
tudy the statements below:
(i) The equilibrium price will be £400 per tonne.
(ii) If the government sets a maximum price of £600 per tonne there will be a surplus of 300 tonnes.
(iii) If the government taxes barley producers by £200 per tonne, the price of barley will rise to £600 per tonne. - (i) and (iii)
In a free market, price increases will distribute scarce goods in favour of those who are willing and able to pay the most. This process is known as – rationing by price
If the government sets a maximum price that is below the equilibrium price - quantity demanded will be greater than quantity supplied.
Which of the following answers is correct for price elasticity of demand (using the mid-point method) as price changes from 30p per kg to 40p per kg? - -1
If the income elasticity of a demand for a good is negative, then the good is: - inferior good
f the quantity demanded of beef increases by 10% when the price of chicken goes up by 8%, the cross price elasticity of
The price of train travel increases by 10% and the demand for train travel falls by 12.5%. The price elasticity of demand for train travel is – -1.25
The short run (retail) supply of freshly cut flowers is much less elastic than that of pot plants because: -florists cannot keep freshly cut flowers as long as pot plants
If demand drops to zero at the slightest increase in price, demand is: - Perfectly elastic
Price elasticity of supply will be greater when: - firms hold large stocks., some time has passed., firms have spare capacity.
If total revenue increases after a price increase, demand – inelastic
If your income increased by 10% and the quantity of pizza you demanded increased by 5%, your income elasticity of demand for pizza is: - 0.5
Price elasticity of demand is the - ratio of the percentage change in quantity demanded to the percentage change in price
If the cross-price elasticity of demand between two goods is negative, then the goods are – complements
tudy the statements below:
(i) The equilibrium price will be £400 per tonne.
(ii) If the government sets a maximum price of £600 per tonne there will be a surplus of 300 tonnes.
(iii) If the government taxes barley producers by £200 per tonne, the price of barley will rise to £600 per tonne. - (i) and (iii)
In a free market, price increases will distribute scarce goods in favour of those who are willing and able to pay the most. This process is known as – rationing by price
If the government sets a maximum price that is below the equilibrium price - quantity demanded will be greater than quantity supplied.
Which of the following answers is correct for price elasticity of demand (using the mid-point method) as price changes from 30p per kg to 40p per kg? - -1
If the income elasticity of a demand for a good is negative, then the good is: - inferior good
f the quantity demanded of beef increases by 10% when the price of chicken goes up by 8%, the cross price elasticity of