HW #2 - Name: _ Date: _ 1. Suppose the price elasticity of...

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Name: __________________________ Date: _____________ 1. Suppose the price elasticity of demand for cheeseburgers equals 0.37. This means the overall demand for cheeseburgers is: B) price inelastic. C) price unit-elastic. D) perfectly price inelastic. 2. If the price of a good is increased by 20% and the quantity demanded changes by 15%, then the price elasticity of demand is equal to: A) 0.75. B) approximately 0.33. C) approximately 1.33. D) 1. 3. Which of the following is a reason for governments imposing or maintaining price controls? B) It may be politically expedient to impose price controls that benefit influential voting groups. C) The government benefits from price controls. D) Price controls improve the efficiency of the market. Page 1 A) price elastic. A) Both consumers and producers benefit from price controls.
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Use the following to answer question 4: Figure: Market for Milk A) P 1 ; Q 1 ; Q 3 B) P 2 Q 2 ; Q C) P 1 ; Q 3 ; Q 1 D) P 3 ; Q 3 ; Q 1 5. Each month Jessica buys exactly 15 Big Macs regardless of the price. Jessica's price elasticity of demand for Big Macs is: A) 0. B) 1. C) greater than 1. D) less than 1, but greater than 0. A) keep prices low. B) increase the quality of the good. C) prevent shortages. D) increase efficiency.
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This note was uploaded on 06/05/2011 for the course ECO 202 taught by Professor Fairchild during the Spring '10 term at Northern Virginia Community College.

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HW #2 - Name: _ Date: _ 1. Suppose the price elasticity of...

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