# ECO 561T Apply Week 2 Assignment New

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ECO 561T Apply Week 2 Assignment New

ECO 561T Apply Week 2 Assignment

1) If the price elasticity of demand for pineapples is 0.75, then a 4 percent increase in the price of pineapples will lead to a:

2) Suppose the company that owns the vending machines on your campus has doubled the price of a can of soda. They then notice that they are selling approximately 15 percent fewer sodas. The price elasticity of demand for sodas from the campus vending machines, therefore, is:

3) Suppose the price P on a given demand curve results in a price elasticity of demand equal to 1. Any price higher than P will lie on the ______ part of the demand curve, and any price lower than P will lie on the ______ part of the demand curve.

4) A demand curve that is drawn as a vertical line has a price elasticity of demand equal to:

5) A demand curve that is drawn as a vertical line has a price elasticity of demand equal to:

6) If the price of textbooks increases by one percent and the quantity demanded falls by one-half percent, then demand for textbooks is:

7) The demand for a good is elastic if the price elasticity of demand is:

8) Refer to the accompanying graph. What is the price elasticity of demand at point A?

9) Suppose that the short-run price elasticity of demand for electricity is 0.03, and the long-run price elasticity of demand is 1.2. One would classify the short-run elasticity as being ___________ and the long-run elasticity as being ____________.

10) Jeans in general have fewer close substitutes than a specific brand of jeans. Therefore, the demand for jeans in general will be _______ than the demand for a specific brand of jeans.

11) Barriers to entry are forces that:

12) Superstar professional athletes can sustain their economic rents because:

13) Adam Smith’s theory of the invisible hand posits the actions of independent, self-interested buyers and sellers will ______ lead to the most efficient allocation of resources.

14) Which of the following best describes how a perfectly competitive industry would respond to a sudden increase in popularity of the product? The market demand curve would shift to the right, leading to:

15) Which of the following is a characteristic of economic rent?

16) Adam Smith’s theory of the invisible hand posits that the most efficient allocation of resources is often achieved by:

17) Assume that all firms in this industry have identical cost curves, and that the market is perfectly competitive.

If S3 is the market supply curve, then in the short run, the profit-maximizing level of output for a single firm in this market is ______ gallons per week.

18) The figure below depicts the short-run market equilibrium in a perfectly competitive market and the cost curves for a representative firm in that market. Assume that all firms in this market have identical cost curves.

19) Assume that all firms in this industry have identical cost curves, and that the market is perfectly competitive.

If S3 is the market supply curve, then each firm in this market will earn an economic loss of ______ per week.

20) A cost-saving innovation in a perfectly competitive industry will lead to:

21) If the price elasticity of demand for pineapples is 0.75, then a 4 percent increase in the price of pineapples will lead to a:

22) Suppose that the short-run price elasticity of demand for electricity is 0.03, and the long-run price elasticity of demand is 1.2. One would classify the short-run elasticity as being ___________ and the long-run elasticity as being ____________.

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