price elasticity of demand and demand Question 22: for bottled water in Missouri
ID: 1152195 • Letter: P
Question
price elasticity of demand and demand Question 22: for bottled water in Missouri is-0.8. In other words, demand in Texas is in Missouri is The price elasticity of demand for bottled water in Texas is-1.5, and the clastic; inelastic B. inelastic; elastic C. elastic; unitarily elastic D. Inelastic, unitary elastic Question 23: The Dubai Chamber estimated, in 2011, that the cross price elasticity of Brazilian beef with respect to the US beef is 3.3. This result means: 3.3 increase in the price of US beef imports will result in a 33% increase in the quantity of B. A 10% increase in the price of US beef imports will result in a 33% increase in the price of C. A 10% increase in the price of US beef imports will result in a 33% decrease in the quantity of D. A 10% increase in the price of US beef imports will result in a 33% decrease in the price of A 10% beef imports from Brazil beef imports from Brazil beef imports from Brazil. beef imports from Brazil 333 raziam 2 o Question 24: When both the Supply and Demand curves increase, then A. The equilibrium quantity will certainly increase. We cannot predict what the movement might B. The equilibrium price will certainly increase. We cannot predict what the movement might be C. Both the equilibrium quantity and equilibrium price will certainly increase (i.e., regardless of D. Both the equilibrium quantity and equilibrium price will certainly decrease (i.e, regardless of be for the equilibrium price, unless we look at the relative shifts of the two curves for the equilibrium quantity, unless we look at the relative shifts of the two curves the relative shifts of the two curves) the relative shifts of the two curves) Question 25: Consider the Abu Dhabi authorities introducing an effective rent control policy Which of the following statements is correct? A. Only landlords (and not tenants) will be made worse off by the introduction of the policy B. Only tenants (and not landlords) will be made worse off by the introduction of the policy Both landlords and tenants will be made worse off by the introduction of the policy D. Both landlords and tenants will be made better off by the introduction of the policyExplanation / Answer
22.
A.
Elasticity in Texas is 1.5 (-ve) that is greater than 1, so it is relatively elastic, whereas elasticity in Missouri is .8 (-ve) that is less than 1, so it is relatively inelastic.
23.
A
Cross price elasticity = % increase in quantity demanded of Brazilian beef / % increase in the price of American beef
Cross price elasticity = 33/10 = 3.3
24.
A.
Equilibrium quantity increases for sure. But, price change depends upon the shift in demand & supply. If demand increases more than the supply, price increases. If supply increases more than the demand, price decreases.
25.
C