1- firm produces and sells two goods, A and B. Good A is known to have many close substitutes; good B makes up a significant portion of most families' budgets. A price increase for each good would most likely cause total revenues from good A to
2- If the price elasticity of demand for a product is -2.5, then a price cut from $2.00 to $1.80 will_____ the quantity demanded by about ______
3-Demand is generally
A) relatively more elastic for "necessities" than it is for "luxuries."
B) equally elastic in both the short run and the long run.
C) relatively more elastic in the short run than in the long run.
D) relatively more elastic in the long run than in the short run.
4- We would expect the cross-price elasticity of demand between dress shirts and ties to be __________, indicating that they are_____________
A) positive; secondary goods
B) negative; substitutes.
C) positive; complements.
D) negative; complements.
5-A price increase from $43 to $49 results in an increase in quantity supplied from 220 units to 240 units. The price elasticity of supply in this price range is (use the midpoint formula):
6-Assume that Oscar is maximizing his total utility and that the equal marginal principle holds by the time he is done allocating his budget.If MUa/Pa = 100/$35, MUb/Pb = 300/?, and MUc/Pc = 400/?, the prices of products B and C
A)must be $105 and $175, respectively.
B) cannot be determined from the information given.
C) must be $100 and $200, respectively.
D)must be $105 and $140, respectively.
7-When diminishing marginal utility starts happening as a person consumes more and more of a given good
A) marginal utility will increase at a diminishing rate.
B) total utility will increase at a diminishing rate.
C) total utility will decrease at a diminishing rate.