Managerial Economics Q.1.0) For each of the following events‚ assume that either the supply curve or the demand curve (not both shifted). Explain which curve shifted and indicate the direction of the shift. a.From 1950 to 1979 the wages paid to fruit pickers increased while the number of fruit pickers employed decreased. b.During the same period the price of radio sets declined‚ while the number of radio sets purchased increased. c.Housing prices are rising but more houses are sold. d.Australian
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measure price nor the units used to measure quantity. Answer: A Topic: The Price Elasticity of Demand Skill: Conceptual When the quantity of coal is measured in kilograms instead of pounds‚ the demand for coal becomes more elastic. less elastic. neither more nor less elastic. undefined. Answer: C Topic: Calculating Elasticity Skill: Recognition 2) The price elasticity of demand depends on A) the units used to measure price and the units used to measure quantity. B) the units used to measure
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Microeconomics I Homework#1 Answer Key Fall 2009 I. Multiple choice question 1 2 3 4 5 6 7 8 9 10 D C C A A D D B A C 11 12 13 14 15 C C A B C 1) Who or what is responsible for the allocation of scarce resources into the production of most goods in the U.S.? A) the American government B) the UN C) the Federal Reserve Bank D) markets and prices Answer: B 2) Which of the following is an example of a normative statement?
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Chapter-III Demand Analysis Contents: 1.1 Meaning of Demand 1.2 Types of Demand 1.2.1 Individual and Market Demand 1.2.2 Autonomous and derived demand 1.2.3 Demand for durable and nondurable goods 1.2.4 Demand for firm’s product and industry product 1.2.5 Demand for consumers and producers goods 1.3 Determinants of Demand 1.4 Demand Function 1.5 Law of Demand 1.6 Demand Schedule 1.7 Demand Curve 1.8 Shift of Demand Curve v/s Movement along the demand curve 1.9 Effect of a Price Change
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Unit – I Nature & Scope of Managerial Economics Contents Fundamental Economics Concepts: Opportunity Cost‚ Discounting principle‚ Time perspective‚ Incremental reasoning‚ Equi-marginal concept. Marginal concept in economics. Economics of information: Risk‚ Uncertainty‚ Asymmetry of information‚ Adverse Selection‚ Market Signaling. The theory of firm; Econometric Models & Economic optimization. ____________________________________________________________________________________
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Chapter 9 – Elasticity and Demand Demand and Elasticity Elasticity is a way to measure the responsiveness of a dependent variable to changes in an independent variable. Elasticity is defined as a ratio of the percentage change in a dependent variable to a percentage change in an independent variable. Elasticity ≡ percentage change of dependent variable Percentage change of independent variable When: Y = f(X) %ΔY E ≡ %ΔX Fal l ’05 © Reynolds 2005 Microeconomics Slide 1 Chapter 9 – Elasticity
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raise or lower price‚ or whether to price discriminate. Price discrimination is a policy of charging consumers different prices for the same product. If demand is elastic‚ revenue is gained by reducing price‚ but if demand is inelastic‚ revenue is gained by raising price. Non-pricing policy: When Price Elasticity of Demand is highly elastic‚ the firm can use advertising and other promotional techniques to reduce elasticity. INCOME ELASCITIY OF DEMAND: In economics‚ income elasticity of demand measures
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change in the quantity demanded divided by the percentage change in the price. Elastic demand that has the coefficient of greater than 1 suggests that there would be a significant change in quantity demanded when there is a little change in price while inelastic demand has a coefficient of less than one‚ which has a little change in quantity demanded even when there is a significant change in price. Unitary demand occurs when there is a coefficient of exactly one and there is an exact change
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ECP 6705 – First Problem Set Fall‚ 2014 Name or Names: (if a group of two) 1. Write a memo to UWF COB Dean Tim O’Keefe explaining why you believe offering a tuition increase for the next semester MBA students will increase total revenue (assume that he has heard of elasticity‚ but is no expert on the subject). 2. Mentone Cabins recently reduced price by 20 percent and saw volume increase by 10 percent. Should the owners reduce price further
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Therefore‚ laborers would benefit when the minimum wage rate is at a level where the cumulative demand for labor at a low wage is unitary elastic and would additionally benefit by increases in the minimum rate provided the cumulative demand for labor is inelastic. Moreover‚ some economists feel there is a close correlation between raising the minimum wage rate in order to improve the livelihood of workers at a low wage and the inelasticity of
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