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ECON 203 Study Guide - Quiz Guide: Demand Curve, Complementary Good, Substitute Good

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ceruleanllama868
23 Mar 2019
School
Concordia University
Department
Economics
Course
ECON 203
Professor
FARHAD SHOKOOHI

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Document Summary

Coverage: chapter 4 elasticity: multiple choice questions, suppose that the demand for widgets is price inelastic. 3. 4. cannot be determined from the information provided. Short questions: the market for cigarettes in canada has been the topic of a lot of debate. Let"s think about how this market works and how it is affected by government intervention. Suppose the demand and supply curves for cigarettes are the following: Ans: pe = , qe = 200 million cartons/week (ii) suppose the government places a per carton excise tax on cigarettes in an effort to reduce smoking. Cigarette producers are required to pay this tax out of their revenues. Draw the supply and demand graph based on the original supply and demand curves, and then show the change caused by this tax. Ans: the equation for the new supply curve is p = 0. 2 qs + 25.

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Related Questions

FILL IN THE BLANKS

Demand for this good is (enter inelastic, elastic or unitary elastic) with respect to price.

This is a (enter normal or inferior) good as income elasticity is (enter less than, greater than or equal) zero, and it is a (enter necessity or luxury) good as income elasticity is (enter less than, greater than or equal) one.

Widgets and gadgets are (enter complements or substitutes), because cross-price elasticity is (enter positive or negative). Widgets and gadgets (enter are or are not) good substitutes because cross-price elasticity is (enter less than, greater than or equal) (enter the numerical value).

12) If the total expenditure on perfume increases when the price of perfume falls, the price elasticity of demand is A) greater than one (demand is elastic). B) less than one (demand is inelastic). C) unity (demand is unit elastic). D) not determinable from the information given. E) exactly zero.

12) If the total expenditure on photocopiers increases when the price of photocopiers rises, the price elasticity of demand is A) greater than one (demand is elastic). B) less than one (demand is inelastic). C) equal to one (demand is unit elastic). D) not determinable from the information given. E) exactly zero.