Ec5Mid012007VersionA

Ec5Mid012007VersionA - Version A ANSWERS TO FIRST MIDTERM...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
ANSWERS TO FIRST MIDTERM EXAM, ECONOMICS 5, FALL 2007—D. RICHARDS Questions 1-4 (6 points each): Use the diagram below describing the 2004 demand for prescription anti-depressants, e.g., Prozac, Zoloft, and Paxil, to answer Question 1-4. In this diagram, one unit equals a container of 100 pills. The quantity is reported in thousands of such units (i.e., 10,000 means that 10 million such units are sold). The price for a 100 pill prescription of Prozac in 2002 was $250 and 30,000 units (again measured in thousands) were sold at that price. $1000 Supply 0 1. At the current equilibrium price, the demand for prescription anti-depressants is: a. inelastic ANSWER b. elastic c. unitary elastic d. undefined 2. St. John’s Wart is a widely available, low-cost herb. The discovery that St. John’s Wart can provide significant relief for depression will likely: a. move prescription drug prices down along the demand curve ANSWER b. increase the elasticity of demand for prescription anti-depressants
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

Ec5Mid012007VersionA - Version A ANSWERS TO FIRST MIDTERM...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online