question
Assume that Diet Coke and Diet Pepsi are substitutes, Also assume that potassium citrate is used to produce Diet Coke. If the price (P) of a Diet Pepsi decreases while simultaneously the P of potassium citrate decreases, ceteris paribus, in the market for Diet Coke their would be:
answer
An indeterminate change in equilibrium Q and a decrease in equilibrium P
question
Representative Loud Blowhard is worried about the cost of a kidney transplant procedure. He proposes capping the amount a hospital can charge for the procedure, arguing that by lowering the price, his proposal will allow more people to get a kidney transplant.
Assume that c.p., the equilibrium P of a kidney transplant procedure is $50,000, and 200 of them are performed per month.
Also assume the representative Blowhards proposal would cap the P at $35,000.
c.p. assuming this proposal becomes law:
Assume that c.p., the equilibrium P of a kidney transplant procedure is $50,000, and 200 of them are performed per month.
Also assume the representative Blowhards proposal would cap the P at $35,000.
c.p. assuming this proposal becomes law:
answer
it will create a shortage in kidney transplants
question
The chief financial officer (CFO) of the Globe-Ex Corporation wants to suggest that demand for Globe-Ex's chemical products is relatively P inelastic.
If the P of its chemical products increases by 10%, then she would have to produce quantity demanded numbers that show:
If the P of its chemical products increases by 10%, then she would have to produce quantity demanded numbers that show:
answer
A decrease in QD of < 10%
question
Assume that a good has a price elasticity of demand (Ed)= -1.46.
Given this c.p., demand for this good is relatively________, and if the price of this good decreased by 10%, quantity demanded will_________ by ____________.
Given this c.p., demand for this good is relatively________, and if the price of this good decreased by 10%, quantity demanded will_________ by ____________.
answer
elastic, increase, 14.6%
question
The P of a taco decreases from $2.25 to $2.00. causing an increase in QD of pizza slices from 70 to 75.
Cross-price elasticity (Exy) is __________ and these goods are ___________
Cross-price elasticity (Exy) is __________ and these goods are ___________
answer
-0.586, complements
question
Colors unlimiteds main rival has just reduced its paint prices by 10%.
Colors Unlimited has decided to not reduce its prices.
The cross-price elasticity (Exy) between the rival paint stores is 1.5.
c.p. given the above information. Color unlimiteds sales will decline by _________.
If Colors Unlimited's Ed= -1.45, then to restore sales back to its original amount, it would have to lower its prices by ___________.
Colors Unlimited has decided to not reduce its prices.
The cross-price elasticity (Exy) between the rival paint stores is 1.5.
c.p. given the above information. Color unlimiteds sales will decline by _________.
If Colors Unlimited's Ed= -1.45, then to restore sales back to its original amount, it would have to lower its prices by ___________.
answer
15%, 10.34%
question
C.p. assume that an individual taco truck represents a very small percentage of the market for tacos from taco trucks, and that consumers view the tacos sold by these taco truck to be perfect substitutes.
Also assume that the individual taco truck can sell as many tacos as it wants at a price of $2.00 per taco.
And finally assume that this taco truck has increasing marginal cost of production.
For this taco truck, its individual D curve will be ________, and to maximize its profits, it should produce and sell tacos up to the point where its marginal cost of a taco ___________.
Also assume that the individual taco truck can sell as many tacos as it wants at a price of $2.00 per taco.
And finally assume that this taco truck has increasing marginal cost of production.
For this taco truck, its individual D curve will be ________, and to maximize its profits, it should produce and sell tacos up to the point where its marginal cost of a taco ___________.
answer
a horizontal line, =$2.00