Reference no: EM133080093
1) If the demand equation for a given period is Qdx = 50 - Px , compute the quantity demanded for x if the price of x is 10 pesos and 15 pesos, the Qdx is in terms of kg. Note: #1 to #6 are interrelated
A. Qdx at 10 pesos is 35 kg, Qdx at 15 pesos is 40 kg
B. Qdx at 10 pesos is 40 kg, Qdx at 15 pesos is 35 kg
C. Qdx at 10 pesos is 40 kg, Qdx at 15 pesos is 45 kg
D. Qdx at 10 pesos is 50 kg, Qdx at 15 pesos is 45 kg
E. None of the above
2. Compute the percentage change in the quantity demanded for x if the old price of x is 10 pesos and the new price of x is 15 pesos Hint: a percentage change is [(new value- old value)/old value]*100 %
A. - 5%
B. 5%
C. -12.5%
D. -25%
E. None of the above
3. Given the demand equation in #1, compute the percentage change in the price of x Use the formula above to compute the percentage change
A. -5%
B. 5%
C. 50%
D. -50%
E. None of the above
4. Given the demand equation in #1, compute the own price elasticity of demand for x when the old price is 10 pesos and the new price is 15 pesos.
A. -0.25
B. 0.25
C. -25%
D. 25%
E. None of the above
5. Which of the following statement/s is/are correct with respect to the own price elasticity of demand that you computed above?
A. The demand is negative indicating an upwardsloping curve
B. The demand for good x is price inelastic
C. The percentage change in the quantity demanded for good x is higher than the percentage change in the price of good x
D. A and B are correct
E. B and C are correct
6. Which of the following is true with own price elasticity?
A. The longer the time under consideration, the more price elastic is the demand because the consumers can find more substitutes in the long run
B. Necessities are less price elastic compared to luxuries
C. The consumers reduced their purchase of good x by 3% when the price of good x increased by 10%, the demand for good x is price inelastic
D. The consumers reduced their purchase of good x by 15% when the price of good x increased by 10%, good x is price elastic
E. All are true
7. Two commodities "x" and "y" are related with the following demand equationQdx = 80 - Px + Py, compute the Qdx if the price of "x" is 15 pesos and the price of "y" is15 pesos. Again. The Qdx is in terms of kg. Note: # 7 to #12 are interrelated
A. 70 kg
B. 75 kg
C. 80 kg
D. -70 kg
E. None of the above
8. Given the demand equation in #7, compute the Qdx if the price of "x" is still 15 pesos but the price of "y" becomes 20 pesos
A. 70 kg
B. 75 kg
C. 80 kg
D. 85 kg
E. None of the above
9. Given the demand equation in #7, compute the percentage change in Qdx given the change in the price of "y" from 15 pesos to 20 pesos, while the price of "x'" remains at 15 pesos
A. -6.25%
B. 6.25%
C. -5%
D. 5%
E. None of the above
10. Given the demand equation in #7, and your solutions for Qdx at the old prices of Px=15, Py=15, and the Qdx at the new prices of Px=15, Py=20, compute the cross-price elasticity of demand
A. 0.17
B. -0.17
C. 0.19
D. -0.19
E. None of the above
11. What is the relationship between good "x" and "y" based on the sign of the cross price elasticity in #10?
A. x and y are complementary goods
B. x and y are substitute goods
C. x and y are not related goods
12. Which of the following statement/s is/are true?
A. Cross price elasticity refers to the response of the consumers in changing the amount purchased for a good given the change in the price of another good
B. If the cross price elasticity is negative, the goods under consideration are complementary
C. If the cross price elasticity is positive, the goods under consideration are substitutes
D. All are true
E. None is true
13. Given the two goods "x" and "y" and the income of the consumers, the demand equation for "x" is defined as Qdx = 100 - 5Px - 5Py + 0.02 Income, compute the Qdx at Px =5 pesos, Py = 10 pesos and income is 10,000 pesos. Qdx is in terms of kg.
A. 300 kg
B. 285 kg
C. 280 kg
D. 225 kg
E. None of the above
14. Given the demand equation in #13, compute the new Qdx if the price of x remains at 5 pesos, price of y remains at 10 pesos if the new income is 15,000.
A. 275 kg
B. 300 kg
C. 325 kg
D. 350 kg
E. None of the above
15. Given your solutions for Qdx in #13 and #14, compute the percentage change in Qdx due to the change in income from 10,000 pesos to 15,000 pesos
A. 100%
B. 44.44%
C. 30.69%
D. 15.23%
E. None of the above
16. Compute the percentage change in the income from 10,000 to 15,000 pesos
A. 30 %
B. 40%
C. 50%
D. 60%
E. None of the above
17. Given your solutions in # 15 and #16, compute the income elasticity of demand for good x
A. 0.78
B. 0.89
C. 0.92
D. 0.95
E. None of the above
18. Is good x in # 17, a normal good or an inferior good?
A. Normal good
B. Inferior good
19. Which of the following is true about income elasticity?
A. Income elasticity refers to the response of the consumers in changing the amount of the good purchased when his income changes
B. When the income elasticity is positive, the good is a normal good
C. When the income elasticity is negative, the good is an inferior good
D. Pork can be considered a normal good at a relatively low income but it can be considered an inferior good at a relatively higher income
E. All are correct
20. Which of the following statement is correct?
A. The greater the number of substitutes, the greater is the own price elasticity of demand
B. The higher the value of the cross price elasticity of demand, the more related are the goods under consideration
C. A commodity can be considered as inferior by some consumers, but it can be considered as a normal good by other consumers
D. All are correct
E. None is correct