CF-SP10-ECO_261_3002_1384_10265123027

CF-SP10-ECO_261_3002_1384_10265123027 - Homework 2 Econ...

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Homework 2 Econ 261, Principles of Microeconomics Instructor: A. Biswas Fall 2010 Due date: September 28, 2010 Homework submission policy : The homework is due at the beginning of due date’s class (that is September 28, 2010) and late submission will not be accepted. The only exception is that if you arrive to class late and submit the homework immediately when entering the classroom, it will be accepted. Once class ends no homework will be accepted (even if class ends early). Homework must be submitted during class. So, for example, homework placed in my mailbox will not be accepted. The only exception is that if you make arrangements with us and obtain our prior permission. If you think any of the questions are ambiguous or have multiple correct answers you should justify your interpretation and defend your answers. Instructions 1. Please write both your name and Student ID# below. 2. Please staple all the pages together and submit at the beginning of September 28 th Class for credits. Name:……………………………………………………………………………………. . z-ID#:……………………………………………………………………………. . True-false type questions: Each question worth 2 points Please indicate your answer clearly. Unclear answers will not earn credit. 1. The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price. True or False? 2. The law of demand states that, other things equal, when the price of a good rises, the quantity demanded of the good rises, and when the price falls, the quantity demanded falls. True or False? 3. When Mario's income decreases, he buys more pasta. For Mario, pasta is a normal good. True or False? 4. Baseballs and baseball bats are substitute goods. True or False? 5. When an increase in the price of one good lowers the demand for another good, the two goods are called complements. True or False?
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6. Necessities tend to have inelastic demands, whereas luxuries have elastic demands. True or False? 7. The demand for Rice Krispies is more elastic than the demand for cereal in general. True or False? 8. The price elasticity of demand is defined as the percentage change in price divided by the percentage change in quantity demanded. True or False? 9. Suppose that when the price rises by 10% for a particular good, the quantity demanded of that good falls by 20%. The price elasticity of demand for this good is equal to 2.0. True or False? 10. A linear, downward-sloping demand curve has a constant slope but a changing elasticity. True or False? 11. When demand is inelastic, a decrease in price increases total revenue. True or False? 12. The income elasticity of demand is defined as the percentage change in quantity
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This note was uploaded on 03/18/2012 for the course ITEC 3290 taught by Professor Dunn during the Spring '12 term at East Carolina University .

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CF-SP10-ECO_261_3002_1384_10265123027 - Homework 2 Econ...

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