assignment-2

assignment-2 - Econ 110 L2 Spring, 2011 Homework Assignment...

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Econ 110 L2 Spring, 2011 Homework Assignment #2 Due on March 17 in room 2394 before 11:50am 1. Multiple choices ( 5 points each, 20 points total) 1) Producers’ total revenue will increase if A) income increases and the good is inferior. B) the price rises and demand is elastic. C) the price rises and demand is inelastic. D) income falls and the good is normal. 2) Of the following, demand is likely to be the least elastic for A) Ford automobiles. B) Toyota automobiles. C) compact disc players. D) toothpicks. 3) Business people often speak about price elasticity without actually using the term. Which statement describes a good with an elastic demand? A) “A price cut won’t help me. It won’t increase my sales, and I’ll just get less money for each unit.” B) “I don’t think a price cut will help my bottom line any. Sure, I’ll sell a bit more, but I’ll more than lose because the price will be lower.” C) “My customers are real shoppers. After I cut my prices just a few cents
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assignment-2 - Econ 110 L2 Spring, 2011 Homework Assignment...

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