EQ6 answers Fall 2010

EQ6 answers Fall 2010 - EQ EQ #6 AGEC AGEC 105 (1/2 pt) (4...

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Unformatted text preview: EQ EQ #6 AGEC AGEC 105 (1/2 pt) (4 pts) October 6, 2010 1. Which of the following combination(s) of goods most closely fits the definition of a complement? You may have more than one answer. (a) Tropicana and Minute Maid orange juice (b) Pepsi and Coca-Cola (c) Mrs. Baird’s bread and Colgate toothpaste (d) Pancakes and maple syrup Which one of the following combination(s) of goods is in line with a cross-price elasticity of zero? You may have more than one answer. cross (a) Mrs. Baird’s bread and Colgate toothpaste (b) Pepsi and Coca-Cola (c) Pancakes and maple syrup (d) Tropicana and Minute Maid orange juice Which of the following combination(s) of goods most closely fits the definition of a substitute? You may have more than one answer. (a) Tropicana and Minute Maid orange juice (b) Pepsi and Coca-Cola (c) Mrs. Baird’s bread and Colgate toothpaste (d) Pancakes and maple syrup (1/2 pt) 2. (1 pt) 3. EQ EQ #6 AGEC AGEC 105 (1 pt) (4 pts) October 6, 2010 4. Assume that a retailer sells 1000 six-packs of Pepsi per day at a price of $3/six-pack. You, as an economic analyst, estimate that the crossprice elasticity between Pepsi and Coca-Cola is 0.8. If the retailer raises the price of Coca-Cola by 5%, how would sales of Pepsi be affected, ceteris paribus? Show all work. %∆QP %∆PCC % ∆PCC ↑ by 5% %∆QP ↑ by 4% = 0.8 40 more units of Pepsi are sold. (1 pt) 5. List any TWO of the four conditions associated with what economists call perfect competition. 1) Homogenous products 2) No barriers of entry or exit 3) Large # of sellers 4) Perfect information ...
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EQ6 answers Fall 2010 - EQ EQ #6 AGEC AGEC 105 (1/2 pt) (4...

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