1. Movement along the demand curve for good X occurs due to a change in:
A.income.
B.the price of good X.
C.the price of a substitute for good X
2. A wireless phone manufacturer introduced a next-generation phone that received a high level of positive publicity. Despite running several high-speed production assembly lines, the manufacturer is still falling short in meeting demand for the phone nine months after introduction. Which of the following statements is the most plausible explanation for the demand/supply imbalance?
A.The phone price is low relative to the equilibrium price.
B.Competitors introduced next-generation phones at a similar price.
C.Consumer incomes grew faster than the manufacturer anticipated.
3. The demand and supply functions for a leading smartphone are furnished below: Qd = 1,000 – 20P + 2I;#Qs = –200 + 50P – 80W;#where,#d = Quantity demanded in number of units#Qssp = Quantity supplied in number of units# Psp = Price per smart phone in $#I = Household income in $ per year W = Wage rate in $ per hour#Currently, the firm has priced the smartphone at $250 per unit. If the wage is $10 per hour and the household income is $9,500 per year, the smartphone’s equilibrium price is closest to:
A.$250.
B.$300.
C.$425.
4. The demand for membership at a local health club is determined by the following equation: Qdhm=400?5Phm where Qdhm is the number of health club members and Phm is the price of membership. If the price of health club membership is $35, the price elasticity of demand is closest to:
A.-0.778.
B.-0.500.
C.-0.438.
5. If the price elasticity coefficient of the demand curve for paper clips is equal to –1, demand is:
A.elastic.
B.inelastic.
C.unit elastic.
6. The market demand function for four-year private universities is given by the equationQdpr = 84 – 3.1Ppr + 0.8I + 0.9Ppuwhere Qdpr is the number of applicants to private universities per year in thousands, Ppr is the average price of private universities (in thousands of USD), I is the household monthly income (in thousands of USD), and Ppu is the average price of public (government-supported) universities (in thousands of USD). Assume that Ppr is equal to 38, I is equal to 100, and Ppu is equal to 18.The price elasticity of demand for private universities is closest to:
A.-3.1.
B.-1.9.
C.0.6.
7. Price elasticity of demand for a good will most likely be greater if:
A.there are no substitutes for the good.
B.consumers consider the good as discretionary.
C.consumers spend a small portion of their budget on the good.
8. An individual’s demand for onions is given by the following equatio Qdo=3?0.05Po+0.009I?0.16Pt where Qdo is the number of onions demanded, Po is the price per pound of onions, I is the household income, and Pt is the price per pound of tomatoes. If the price of onions is $1.25, household income is $2,500, and the price of tomatoes is $3.75, the cross-price elasticity of demand for onions with respect to the price of tomatoes is closest to:
A.–1.0597.
B.–0.0242.
C.–0.0081.
9. The market demand function for four-year private universities is given by the equationQdpr = 84 – 3.1Ppr + 0.8I + 0.9Ppu where Qdpr is the number of applicants to private universities per year in thousands, Ppr is the average price of private universities (in thousands of USD), I is the household monthly income (in thousands of USD), and Ppu is the average price of public (government-supported) universities (in thousands of USD). Assume that Ppr is equal to 38, I is equal to 100, and Ppu is equal to 18.The cross elasticity of demand for private universities is closest to
A.0.3.
B.3.1.
C.3.9.
10. If the cross -price elasticity between two goods is negative ,the two goods are classified as :
A.normal.
B.substitutes.
C.complements.