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20 Mar 2018

43) The demand for corn increases. As a result, the price of corn , and the less elastic the supply of corn, the will be the effect on the price. A) falls; greater B) rises: smaller C) rises; greater D) falls; smaller E) None of the above because the change in the price is effected by the price elasticity of demand.

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Related questions

1.if a stock is expected to pay a dividend of $ 25 for the current year, what is the approximate present value of this stock, given at discount rate of 10 % and a dividend growth rate 2 %.

2. suppose the price of beans rises from $1.00 a pound, to $2.00 a pound quantity demanded falls from 10 units to 6 units, compute the coefficient of elasticity of demand for beans using the arc elasticity approach.

3. if a price of corn is $ 3.00 a bushel, 5000 bushels would be demanded. if the price rises to $ 4.00 a bushel , 4000 bushel would be demanded.

A. what is the arc price elasticity of demand ?

B. based on this answer, if the price of corn rose to $ 5.00 a bushel , what would be the demand for corn ?

C if the price of corn decreased from 4.00 to $ 3.00 a bushel , what would be the change in total revenue for sellers of corn ?

D. if the price of corn increased from 4.00 to $ 5.00 a bushel, what would be the change in total revenue for sellers of corn ?

1. In each case below, what is the value of the price elasticity of demand? Is demand perfectly inelastic, inelastic, unit elastic, elastic or perfectly elastic?

a. Price falls by 10%, quantity demanded rises by 8%

b. Price rises by 3%, quantity demanded falls by 3%

c. Price rises by 1%, quantity demanded falls by 5%

d. Price rises by 5%, quantity demanded collapses to zero

e. Price falls by 2%, quantity demanded does not change

1. Suppose the supply curve with no quota is

Q No Quota=-10 + 0.5p

and the market supply with a quota is

Q Quota=0.5 + 0.25p.

Output (Q) is in thousands of units.

Assuming an inverse demand curve of p = 80-2Q, what will be the effect of a binding quota on equilibrium price and quantity?

A. Price rises by $2.67 and output falls by 1.33 thousand.

B. Price falls by $5 and output falls by 2 thousand.

C. Price falls by $1.33 and output rises by 2.67 thousand.

D. Price rises by $5 and output falls by 2 thousand.

E. Price falls by $3 and output rises by 1.25 thousand.

F. Price rises by $5 and output rises by 2 thousand.

2.

Which of the following is true?

A. The elasticity of supply varies only along the upward-sloping linear supply curves.

B. The elasticity of supply varies along most supply curves.

C. The elasticity of supply is constant along most supply curves.

D. None of the above.

3.

A. When I> 1, supply is considered elastic.

B. When 0<I< 1, supply is considered inelastic.

C. When I = 1, supply is considered unit elastic.

D. All of the above.

E. None of the above.

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