04PracticeProblemsElasticity.pdf

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Department
Economics
Course
ECO202Y1
Professor
Robert Gazzale
Semester
Fall

Description
UNIVERSITY OF TORONTO ECON 100 INTRODUCTORY ECONOMICS DEPARTMENT OF ECONOMICS ROBERT GAZZALE PHDPRACTICE PROBLEMS ELASTICITY1 Suppose the price of barley increases by 1653 If breweries buy 328 less barley after the price increase the total revenue for barley producers willbecause theeffect is greater than theeffectA decrease quantity priceB increase price quantityC not change quantity priceD increase quantity price 2 Suppose the crossprice elasticity between demand for Burger King burgers and the price of McDonalds burgers is 08 If McDonalds increases the price of its burgers by 10 thenA Burger King will sell 10 more burgersB Burger King will sell 8 more burgersC Burger King will sell 8 fewer burgersD We cannot tell what will happen to Burger King but McDonalds will sell 8 fewer burgers 3 We predict the longrun price elasticity of demand of gasoline would bethe shortrun price elasticity of demand of gasolineA less thanB larger thanC equal toD not comparable to 4 If the price of chocolatecovered peanuts decreases from 110 to 090 and the quantity demanded increases from 190 bags to 210 bags then the price elasticity of demand using the midpoint method isA 0B 05C 1D 2 5 An attorney supplies 40 hours of work per week when her fee is 100 per hour but supplies 60 hours of work per week when her fee rises to 120 per hour Using the midpoint formula her elasticity of supply is equal toA 1B 08C 22D 045 6 It is very difficult for Julia to find inexpensive and available inputs for her business Because of this we predict that Julias price elasticity of supply isA elasticB inelasticC unitelasticD perfectly elastic 201209PRACTICE PROBLEMS ELASTICITY 1
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