Sample_Questions

Sample_Questions - 2 1 Suppose demand for inkjet printers...

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

View Full Document Right Arrow Icon
1 PAM 2000, Spring 2009 Sample Questions for Prelim I I. True, False or Uncertain. Explain. 1) It is possible for Sue to be maximizing utility at a particular choice of bananas and pears, but for the marginal rate of substitution between bananas and pears to exceed the ratio of prices at those choice. 2) If a pest destroys Florida's fruit crop, then the supply of fruit will decrease, causing the equilibrium of fruit price to rise and the equilibrium quantity to fall. 3) The consumer’s optimal bundle (define), is likely to change if both her income and the prices of the goods she buys double. 4) The demand curve for a good will become less elastic the shorter the time period being considered. 5) It is possible for an indifference curve to have a positive slope. Problem Solving
Image of page 1

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

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

Unformatted text preview: 2 1) Suppose demand for inkjet printers is estimated to be Q = 1000 – 5 p + 10 p X – 2 p Z + 0.1 Y . If p = 80,, p X = 50, p Z = 150, and Y = 20,000; answer the following: a. What is the price elasticity of demand? b. What is the cross price elasticity with respect to commodity X ? Give an example of what commodity X might be. c. What is the cross price elasticity with respect to commodity Z ? Give an example of what commodity Z might be. d. What is the income elasticity? 2) Suppose a tax on coke of $0.10 per can is levied on firms. As a result of the tax, the equilibrium price increases from $1.20 to $1.25. What fraction of the incidence falls on consumers? On firms? Suppose the supply elasticity is 0.6. What must the demand elasticity be?...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern