Reference no: EM131240543
1. INCOME QUANTITY PURCHASED Automobiles Coffee Tea $45,000 4 8 5 $30,000 2 10 10 Refer to table above. What is the income elasticity of demand for coffee?
A. .45 B. 2.6 C. -.75 D. -1.33 E. We don’t have enough information to calculate income elasticity
2. A price elasticity of demand for good X equal to -.75 implies
A. if price increases $1.00, demand will decrease by .75 B. if price decreases by $.75,quantity demanded will increase by 1 C. if price increases by 1%, demand will decrease by .75% D. if price decreases by 1%, quantity demanded will increase by .75% E. a price of $1.00 will result in a sales increase of .75 units
3. Suppose the demand curve for soda pop drinks in ounces is: P = 200 – 2QD and the supply curve is: P = 100 + 3QS. What are the consumer and producer surplus, respectively, in the market at the equilibrium price and quantity?
A. $800, $600 B. $1400, $600 C. $400, $ 600 D. $400, $ 1000 E. Cannot be determined from the information given
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