econ 2110 exam 2 Questions And Answers

econ 2110 exam 2 Questions And
Answers
"Elasticity"qmeasuresqtheqrelationshipqbetween
a.supplyqandqdemand
b.quantityqsuppliedqandqquantityqdemanded
c.supplyqandqclosenessqofqsubstitutes
d.priceqandqquantity
e.Noneqofqtheqaboveq-qCORRECTqqANSWER-d.priceqandqquantity

%qchangeqformulaq-qCORRECTqqANSWER-new-old/oldqx100%

|qEdq|q<q1q-qCORRECTqqANSWER-inelastic

|qEdq|q=q1q-qCORRECTqqANSWER-unitqelastic

|qEdq|q>q1q-qCORRECTqqANSWER-elastic

29.Ifqtheqelasticityqofqdemandqforqcameraqfilmqisq-
2.6,qandqtheqpriceqofqfilmqisqraisedqbyq10qpercent,
a.theqquantityqdemandedqwillqfallqbyq2.6qpercent
b.theqquantityqdemandedqwillqfallqbyq26qpercent
c.theqquantityqdemandedqwillqfallqbyq260qpercent
d.theqquantityqdemandedqmustqfall,qbutqweqneedqmoreqinformationqtoqdetermineqbyqhowqm
uch.q-qCORRECTqqANSWER-b.theqquantityqdemandedqwillqfallqbyq26qpercent

Aqbusinesswomanqsaysq"Noqmatterqhowqmuchqweqcutqprice,qweqjustqdon'tqseemqtoqgetqman
yqnewqcustomers."qInqotherqwords,qsheqthinksqdemandqforqherqproductqis
a.lessqthanqtheqsupply
b.inelastic
c.elastic
d.unitqelasticq-qCORRECTqqANSWER-b.inelastic

AqrecentqWallqStreetqJournalqarticleqdescribesqhowqtheqsalariesqpaidqtoqGermanqengineersq
areqrisingqsharply.qTheqarticleqbearsqtheqheadline,q"InqGermany,qtheqDemandqforqEngineer
sqOutrunsqSupply."qThinkqlikeqanqeconomist:qWhichqofqtheqfollowingqheadlinesqexpressesqt
heqissueqcorrectly?
a."InqGermany,qtheqDemandqforqEngineersqHasqIncreased."

, b."InqGermany,qtheqDemandqforqEngineersqisqAboveqtheqSupply."
c."InqGermany,qtheqMarketqforqEngineersqisqNotqinqEquilibrium."
d."InqGermany,qtheqSupplyqofqEngineersqisqNotqUpwardqSloping."
e.Theqoriginalqheadlineqisqexpressedqcorrectlyq-qCORRECTqqANSWER-
a."InqGermany,qtheqDemandqforqEngineersqHasqIncreased."

Becauseqtheqdemandqforqwheatqtendsqtoqbeqinelastic,qtheqdevelopmentqofqaqnew,qmoreqpro
ductiveqhybridqwheatqwouldqtendqtoq
a.increaseqtheqtotalqrevenueqofqwheatqfarmers
b.decreaseqtheqtotalqrevenueqofqwheatqfarmers
c.weakenqtheqdemandqforqwheat
d.decreaseqtheqsupplyqofqwheatq-qCORRECTqqANSWER-
b.decreaseqtheqtotalqrevenueqofqwheatqfarmers

CoffeeqgrowersqwillqbeqhappyqaboutqtheqfrostqkillingqaqsignificantqamountqofqtheqBrazilianqco
ffeeqcropqonlyqifqdemandqis
a.elastic
b.inelastic
c.perfectlyqelastic
d.downwardqslopingq-qCORRECTqqANSWER-b.inelastic

demandqshiftersq-qCORRECTqqANSWER-TIPqME
(tastes,qincome,qpriceqofqrelatedqgoods,qmarketqsize,qexpectations)

Determinantsqofqtheqelasticityqofqdemandq-qCORRECTqqANSWER--
Availabilityqofqsubstitutes
-Timeqhorizon
-Productqcategoryqversusqspecificqbrand
-Necessityqversusqluxury
-Purchaseqsize

Determinantsqofqtheqelasticityqofqsupplyq-qCORRECTqqANSWER--Changeqinqper-
unitqcostsqwithqincreasedqproduction
-Timeqhorizon
-Shareqofqmarketqforqinputs
-Geographicqscope

elasticityqofqdemandqformulaq-qCORRECTqqANSWER-
%qchangeqinqquantityqdemandedq/q%qchangeqinqprice

elasticityqofqsupplyqformulaq-qCORRECTqqANSWER-
%qchangeqinqquantityqsuppliedq/q%qchangeqinqprice

fqaqgoodqisqaqnecessity,qdemandqforqthatqgoodqwouldqtendqtoqbe
a.elastic
b.inelastic