Assign2key_83215497613672146 10f

Assign2key_83215497613672146 10f - University of California...

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University of California, Irvine Department of Economics Econ 20A: Basic Economics I Prof. Safarzadeh Student Name :_________________ Assignment # 2 Student ID :_________________ I. Mark the best answer to the following question in the space provided to the left of the questions. For multiple choice questions, please use ScanTron. Answer question 1 to 5 based on the following assumptions: A food vendor raises price of coffee from $1.00 a cup to $1.10 a cup. Demand for coffee decreases from 1000 cups to 800 cups. 1- Price elasticity of demand for coffee is, a- .5 c- 2 b- 2% d- .5% e- 1.2 2- Demand for coffee is price ______________ a- inelastic good c- unit elastic good b- elastic good d- a healthy good e- none of the above 3- The increase in price of coffee will ____________ a- increase the revenue of the food vendor. b- decrease the revenue of the food vendor. c- not change the revenue of the food vendor. d- none of the above 4 The increase in price of coffee will _________ a- increase the spending of the vendor’s clients on coffee. b- decrease the spending of the vendor’s clients on coffee. c- not change the spending of the vendor’s clients on coffee. d- none of the above 5- If you were advising the vendor on pricing of coffee, you would advise her to _____ a- raise the price of coffee. b- lower the price of coffee, d- don’t change the price of coffee c- none of the above 6- A higher burden of an increase in sales tax on the luxury cars Ferrari Testerossa will fall on the, a- poor people c- buyers b- rich people d- sellers e- government Demand and supply for a product is given as Qd = 90 - 2P and Qs = 4P, respectively. Answer questions 7-18 based on the given information. 7- The equilibrium quantity in the market is ______ a- 90 c- 15 b- 120 d- 45 e- 60
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8- The equilibrium price in the market is ______ a- 90 c- 15 b- 120 d- 45 e- 60 9- At price, P = 20, there will be a ____ a- shortage of 40 units. c- a surplus of 30 units
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Assign2key_83215497613672146 10f - University of California...

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