Question :
181.Supposethat50hotdogsaredemandedataparticularprice.Ifthepriceofhotdogsrisesfromthatpriceby5percent,thenumberofhotdogsdemandedfallsto48.Usingthemidpointapproachtocalculatethepriceelasticityofdemand,itfollowsthatthe
: 1262375
181.Supposethat50hotdogsaredemandedataparticularprice.Ifthepriceofhotdogsrisesfromthatpriceby5percent,thenumberofhotdogsdemandedfallsto48.Usingthemidpointapproachtocalculatethepriceelasticityofdemand,itfollowsthatthe
a.demandforhotdogsinthispricerangeisunitelastic.
b.priceincreasewilldecreasethetotalrevenueofhotdogsellers.
c.priceelasticityofdemandforhotdogsinthispricerangeisabout1.22.
d.priceelasticityofdemandforhotdogsinthispricerangeisabout0.82.
182.Supposethat300bottlesofsodaaredemandedataparticularprice.Ifthepriceofabottleofsodarisesfromthatpriceby6percent,thenumberofbottlesofsodademandedfallsto275.Usingthemidpointapproachtocalculatethepriceelasticityofdemand,itfollowsthatthe
a.demandforbottlesofsodainthispricerangeisperfectlyelastic.
b.priceincreasewillincreasethetotalrevenueofsodasellers.
c.priceelasticityofdemandforbottlesofsodainthispricerangeisabout0.69.
d.priceelasticityofdemandforbottlesofsodainthispricerangeisabout1.45.
183.Whenauniversitybookstorepriceschemistrytextbooksat$200each,itgenerallysells120bookspermonth.Ifitlowersthepriceto$160,salesincreaseto160bookspermonth.Giventhisinformation,weknowthatthepriceelasticityofdemandforchemistrybooksisabout
a.1.29,andadecreaseinpricefrom$200to$160resultsinanincreaseintotalrevenue.
b.1.29,andadecreaseinpricefrom$200to$160resultsinadecreaseintotalrevenue.
c.0.78,andadecreaseinpricefrom$200to$160resultsinanincreaseintotalrevenue.
d.0.78,andadecreaseinpricefrom$200to$160resultsinadecreaseintotalrevenue.
184.Acitywantstoraiserevenuestobuildanewmunicipalswimmingpoolnextyear.Themayorsuggeststhatthecityraisethepriceofadmissiontothecurrentmunicipalpoolsthisyeartoraiserevenues.Thecitymanagersuggeststhatthecitylowerthepriceofadmissiontoraiserevenues.Whoiscorrect?
a.themayor
b.thecitymanager
c.Theanswerdependsonthepriceelasticityofdemand.
d.Theanswerdependsonthecostsofconstructionofthenewmunicipalswimmingpool.
185.Acitywantstoraiserevenuestobuildanewmunicipalswimmingpoolnextyear.Themayorsuggeststhatthecityraisethepriceofadmissiontothecurrentmunicipalpoolsthisyeartoraiserevenues.Thecitymanagersuggeststhatthecitylowerthepriceofadmissiontoraiserevenues.Whoiscorrect?
a.Boththemayorandcitymanagerwouldbecorrectifdemandwerepriceelastic.
b.Boththemayorandcitymanagerwouldbecorrectifdemandwerepriceinelastic.
c.Themayorwouldbecorrectifdemandwerepriceelastic;thecitymanagerwouldbecorrectifdemandwerepriceinelastic.
d.Themayorwouldbecorrectifdemandwerepriceinelastic;thecitymanagerwouldbecorrectifdemandwerepriceelastic.
186.Youhavejustbeenhiredasabusinessconsultanttodeterminewhatpricingpolicywouldbeappropriatetoincreasethetotalrevenueofabakery.Thefirststepyouwouldtakewouldbeto
a.increasethepriceofeveryloafofbreadinthestore.
b.lookforwaystocutcostsandincreaseprofitforthebakery.
c.determinethepriceelasticityofdemandforthebakery’sproducts.
d.determinethepriceelasticityofsupplyforthebakery’sproducts.
187.Youareinchargeofthelocalcity-ownedaquaticcenter.Youneedtoincreasetherevenuegeneratedbytheaquaticcentertomeetexpenses.Themayoradvisesyoutoincreasethepriceofadaypass.Thecitymanagerrecommendsreducingthepriceofadaypass.Yourealizethat
a.themayorthinksdemandiselastic,andthecitymanagerthinksdemandisinelastic.
b.boththemayorandthecitymanagerthinkthatdemandiselastic.
c.boththemayorandthecitymanagerthinkthatdemandisinelastic.
d.themayorthinksdemandisinelastic,andthecitymanagerthinksdemandiselastic.
188.GetSmartUniversityiscontemplatinganincreaseintuitiontoenhancerevenue.IfGSUfeelsthatraisingtuitionwouldenhancerevenue,itis
a.ignoringthelawofdemand.
b.assumingthatthedemandforuniversityeducationiselastic.
c.assumingthatthedemandforuniversityeducationisinelastic.
d.assumingthatthesupplyofuniversityeducationiselastic.
189.Ifthepriceelasticityofdemandforapplesis0.8,thena2.4%increaseinthepriceofappleswilldecreasethequantitydemandedofapplesby
a.1.92%,andapplessellers’totalrevenuewillincreaseasaresult.
b.1.92%,andapplessellers’totalrevenuewilldecreaseasaresult.
c.3%,andapplessellers’totalrevenuewillincreaseasaresult.
d.3%,andapplessellers’totalrevenuewilldecreaseasaresult.
190.Ifthepriceelasticityofdemandforaluminumfoilis1.45,thena2.4%decreaseinthepriceofaluminumfoilwillincreasethequantitydemandedofaluminumfoilby
a.1.66%,andaluminumfoilsellers’totalrevenuewillincreaseasaresult.
b.1.66%,andaluminumfoilsellers’totalrevenuewilldecreaseasaresult.
c.3.48%,andaluminumfoilsellers’totalrevenuewillincreaseasaresult.
d.3.48%,andaluminumfoilsellers’totalrevenuewilldecreaseasaresult.