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KIC000076 - Student Instructor koltheom alkofithi...

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Unformatted text preview: Student:_ Instructor: koltheom alkofithi Assignment: Hw (116-2 Dnte:10.-"21.=‘09 Course: Eco 2301-05. g'l‘hne: 12:24 PM Book: Hubbardv‘O'Brien: Microeconomics l l 3° _._______-____-___.- _ __ -- M. O Suppose a frost destroys the tomato crop in California but farmers see an increase in their revenues. Which of the following best explains this? j a. The cross- price elasticity between tomatoes and most other substitute vegetable is very low. ", LE5. The decrease in supply led to huge price increases. to? <3. The demand for tomatoes is price inelastic. j___'= D. Tomatoes are necessities. 34. The price elasticity oi'an upward - sloping supply curve is always 2 . a. gmaterthan one. it? =: positive. LA. impossible to determine. [2 negative. 1 35. Suppose the value of the price elasticity of supply is 4. What does this mcan‘? 'i. A 1 percent increase in the price of the good causes the supply curve to shift upward by 4 percent. r-n For every $1 increase in price, quantity supplied increases by 4 units. .9 : A l percent increase in the price of the good causes quantity supplied to increase by 4 percent. A 4 percent increase in the price ot‘thc good causes quantity supplied to increase by I percent. & Suppose a 4 percent increase in price results in a 2 percent increase in the quantity supplied ot'a good. Calculate the price elasticity of supply and characterize the product. V 0.5; the product is price inelastic 2; the product is price elastic 50%; the product is price inelastic 0.2; the product is price inelastic ...
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