Reference no: EM133232168

Assignment:

1. What effect will an increase in the price of grapes have in the market for wine?

• Increase demand
• Increase supply
• Decrease supply
• Decrease demand

2. Refer to the following situation for the questions below. The coefficient of the price elasticity of demand for a good is 2. The price is now $5, and the quantity demanded at that price is 100. Refer to data above. If the price rises to $6, then total revenue will change to:

• $360
• $500
• $600
• $300

3. If the cross-price elasticity of demand between A and B is 0.65, then we know that:

• A and B are complements
• A and B are substitutes
• the demand for B is inelastic
• the demand for A is elastic

4. If the supply of apartments is increasing more rapidly than the demand, the likely result will be

• lower apartment rents.
• higher apartment rents.
• an increase in the demand for single-family homes, a substitute for apartments.
• higher apartment rents and an increase in the demand for apartments and mobile homes.
• an increase in the demand for mobile homes.

5. An increase in income from $7500 to $9000 causes an increase in purchase of a good from 3000 to 3500 units. The mid-point income elasticity of demand for that good must therefore be:

• 0.83
• 0.61
• 3.60
• 1.20

6. A perfectly inelastic demand curve is likely to exist for which of the following items?

• fresh produce
• beef
• prescription drugs
• beer