Questions:
1. The demand for good X has been estimated by QXd =12 - 3PX + 4PY. Suppose that good X sells at $2 per unit and good Y sells for $1 per unit. Calculate the own price elasticity.
A. -0.2
B. -0.3
C. -0.5
D. -0.6
2. If quantity demanded for sneakers falls by 10% when price increases 25% we know that the absolute value of the own-price elasticity of sneakers is:
A. 2.5
B. 0.4
C. 2.0
D. 0.27
3. The demand curve for a good is horizontal when it is:
A. A perfectly inelastic good
B. A unitary elastic good
C. A perfectly elastic good
D. An
4. Suppose QXd = 10,000 - 2 PX + 3 PY - 4.5M , where PX = $100, PY = $50, and M = $2,000. What is the own-price elasticity of demand?
A. -2.34
B. -0.78
C. -0.21
D. -1.21
5. If the price of pork chops falls from $8 to $6, and this leads to an increase in demand for apple sauce from 100 to 140 jars, what is the cross price-elasticity of apple sauce and pork chops at a pork chop price of $6?
A. -0.1.17
B. 2.71
C. 0.42
D. -0.86