(85) Here are the lyrics from If I Die Young by The Band Perry.

04 Jun (85) Here are the lyrics from If I Die Young by The Band Perry.

Question
1. Which issue comes from microeconomics?

a. Unemployment.

b. Inflation.

c. Foreign trade.

d. Grocery Shopping.

2. Identify the positive economic statement.

a. An increase in cigarette prices will make people smoke less.

b. Increasing cigarette prices is a good thing.

c. The government should increase cigarette prices because cigarettes are bad.

d. I would rather someone chew tobacco than smoke.

3. In the film, A Knight’s Tale, the peasants decide to reinvest 13 silver coins in training to become better at jousting. This reinvestment is known as what kind of good?

a. consumer good

b. an inferior good

c. a capital good

d. It is not a good, it is a bad.

4. If the demand for a good rises when your income rises, the good is

(a) inferior

(b) normal

(c) capital

(d) awesome

5. Economics is

(a) the study of how people make choices

(b) the study of stock trading

(c) the study of money

(d) the study of large corporations

6. Consider a demand curve for ground beef. We move alongthe demand curve when

(a) the price of hamburger buns increases

(b) when a news report comes out saying that ground beef cures cancer

(c) only the price of ground beef changes

(d) the price of ground turkey decreases

7. If it takes even a small amount of time, energy or money to acquire then a good is

(a) abundant

(b) in shortage

(c) cheap

(d) scarce

8. A person is considering traveling round-trip from New York to Chicago. A plane trip takes two hours each way and costs $300 round trip. A bus trip takes 12 hours each way and costs $220 round trip. If this person values their time at $10/hr, what form of transportation should they take?

(a) the bus

(b) the plane

(c) It doesn’t matter.

(d) We can’t tell given the information in the question.

9. In the example in the previous question, what is the hourly rate where this person would be indifferent between plane and bus travel?

(a) $4/hr.

(b) $2/hr.

(c) $10/hr (the same hourly rate as before)

(d) $20/hr

10. A demand curve for a good slopes downward because

(a) as our income grows, we demand less of the good

(b) there is an inverse relationship between the price of a good and the quantity demanded of that good.

(c) there is a direct relationship between the price of a good and the quantity demanded of that good.

(d) when the price of a good increases, we demand more of it.

11. If the demand for a good decreases when your income increases, then the good is

(a) an economic bad

(b) a normal good

(c) an inferior good

(d) expensive

12. During the Great Depression the United States was not utilizing all of its resources. When WWII started it could therefore increase the production of both guns and butter at the same time.

Therefore, on the above graph, the US went from:

(a) Point A to Point B

(b) Point B to Point C

(c) Point C to Point D

(d) Point A to Point C

13. When we graphically represented what we saw in the film “The Hudsucker Proxy,”

there was a shift in the demand curve because

(a) the price of hula hoops rose dramatically to $3.99

(b) there was a sudden increase in interest in hula hoops

(c) there was no shift in the demand curve

(d) the cost to produce hula hoops suddenly increased

14. Given the following production table, and the law of comparative advantage we discussed in class, which assignment of duties makes the most sense?

Tony

Manny

Cakes

Kilos of Yeyo

Cakes

Kilos of Yeyo

0

8

0

12

2

6

1

9

4

4

2

6

6

2

3

3

8

0

4

0

(a) Tony and Manny should each split their time between baking cakes and making yeyo.

(b) Tony should do the baking and Manny should make the yeyo.

(c) Manny should do the baking and Tony should make the yeyo.

(d) Drugs are bad, so they should both stick to baking cakes.

15. Consider a supply curve for raw lumber (wood). If, all of the sudden there is a huge fire that burns half of all trees in the world, then the supply curve for raw lumber

(a) shifts to the right

(b) does not shift at all

(c) shifts to the left

(d) becomes downward sloping

16. Consider a demand curve for pork. If the price of beef decreases while the price of pork stays the same, then I would consume less pork because.

(a) beef is an inferior good

(b) beef is a normal good

(c) beef and pork are complements

(d) beef and pork are substitutes

17. The Production Possibilities Curve is bowed out because of

(a) the Law of Decreasing Relative Cost

(b) the fact that every point on the PPC is efficient

(c) the Law of Increasing Relative Cost

(d) the fact that it is easier to be inefficient in production

18. Consider a demand curve for tortilla chips. If the price of salsa decreases while the

price of tortilla chips stays the same, then I would consume more tortilla chips because.

(a) salsa is an inferior good

(b) salsa is a normal good

(c) tortilla chips and salsa are complements

(d) tortilla chips and salsa are substitutes

19. On the Production Possibilities Curve

(a) technology is constantly changing

(b) there are no trade-offs

(c) resources cannot be used fully

(d) resource inputs are fixed

20. When someone wishes to invest in more capital goods, it is usually true that

(a) there will be fewer consumer goods available to her in the future

(b) there are no opportunity costs involved in this

(c) she must give up some consumer goods in the present

(d) she will operate inefficiently.

21. Adam Smith, the founder of modern economics, put forth the “invisible hand” principle of self-interest. Which modern example is most consistent with what Smith believed?

a. McDonald’s has a dollar menu.

b. Fans at a game search around the stadium for the shortest concession lines.

c. Dunkin Donuts also sells coffee in order to compete with Starbucks.

d. Suppliers try to make the largest profit they can by charging the highest price possible.

22. Which issue comes from MACROeconomics?

e. The price of the buffet at Cici’s Pizza is $4.99.

f. The national unemployment rate increased from 4.7 to 5.0% last month.

g. New hybrid cars save thirty percent more gas than conventional vehicles.

h. Many wine customers from Pennsylvania choose to buy their favorites wines from vendors outside of Pennsylvania in order to avoid high state taxes on alcohol.

23. Identify the normative statement?

e. Tickets to see the upcoming Fergie concert at Beaver stadium are $35.

f. Being able to see Fergie perform live for $35 is a good deal.

g. Fergie’s favorite Black Eyed Peas song to perform is “Let’s Get It Started.”

h. Fergie’s debut solo album, The Dutchess, went platinum in both America and Japan.

24. In the film, The Hudsucker Proxy, during the first part of the scene the price falls from $1.79 to “free with any purchase”. During this time no customers show up at the toy store to buy hula hoops, how would we illustrate this using demand and supply?

a. There was a decrease in supply (shift in the supply curve)

b. There was an increase in supply (shift in the supply curve)

c. There was a decrease in demand (shift in the demand curve)

d. The price reduction causes movements along both the supply and demand curves but it does not cause them to shift.

25. What is the opportunity cost of taking this exam?

(a) All of things that you could have done by not studying.

(b) Each of the questions that you miss on the exam.

(c) The highest valued alternative that you gave up to prepare for and attend the exam.

(d) The money you spent to buy Nittany Notes, the textbook, redacted notes, and all the other materials you used to study with.

26. One of the chief problems with exchange by barter (like the animal trading game we participated in) is that

a. there is too much demand

b. there is too much supply

c. exchange requires a double coincidence of wants among traders

d. the entire market consists of only a few traders.

27. Which of the following is most likely to shift the demand curve for a good to the right?

a. An decrease in the cost of production of the good

b. The introduction of a new technology that lowers the cost of producing the good.

c. A decrease in the price of the good

d. An increase in the price of a substitute good

28. If there is an excess supply of a good, we expect that

a. The price of the good will rise.

b. The supply curve for the good will shift to the left

c. The demand curve for the good will shift to the right.

d. The price of the good will fall.

29. Which of the following is most likely to increase the equilibrium price charged and increase the equilibrium quantity of customers at Dunkin Donuts, located downtown?

a. An increase in prices at Starbucks, a competitor one block away.

b. A new technology that makes it cheaper to mass-produce donuts.

c. An increase in the rent paid by Dunkin Donuts.

d. Starbucks decides to renovate, expand and offer a better experience at lower prices.

30. According to the law of comparative advantage, a particular task is performed most efficiently by the individual with the lowest

a. wage rate.

b. tax liability.

c. net worth.

d. opportunity cost.

31. The highest-valued, next-best alternative that must be sacrificed to attain something or satisfy a want is called

(a) a marginal cost

(b) a financial cost

(c) an opportunity cost

(d) a price

32. Which of the following would cause an increase in the price of gasoline and an expansion in the equilibrium quantity?

a. an increase in the price of crude oil, a key ingredient required for the production of gasoline

b. the introduction of a miracle carburetor that substantially improves the gas mileage of automobiles

c. a recession that substantially reduces the income of households

d. an increase in the popularity and use of Sport Utility Vehicles that consume a

lot of gasoline per mile driven

33. If an increase in the price of peaches reduces the demand for cream, this indicates that peaches and cream are

a. normal goods.

b. inferior goods.

c. complements.

d. substitutes.

34. Economics is

a. the study of large corporations

b. the study of stock trading

c. the study of money

d. the study of how people make choices.

35. Consider a demand curve for potato chips. We move alongthe demand curve when

a. the price of potato chips increases.

b. the price of Doritos decreases.

c. the price of dip increases.

d. when a news report indicates that fried potatoes cause cancer.

36. A production possibilities curve graphically represents the maximum quantities of two products produced when all resources in the economy are being used efficiently. If an economy operates at a point inside its production possibilities curve,

a. it lacks the resources necessary to produce at full employment.

b. it is utilizing some resources inefficiently.

c. it does not confront the problem of scarce goods relative to unlimited wants.

d. it does not exist in the real world since it is impossible for an economy to operate inside its production possibilities curve.

37. This term refers to the specific components that are left out of a model.

a. endogenous

b. exogenous

c. caveat emptor

d. ceteris paribus

38. If the cost of the components used to make the Wii suddenly increases what will happen to the demand curve for Wii’s?

a. shifts to the left

b. it becomes upward sloping

c. shifts to the right

d. nothing happens to the demand for the Wii

39. Kelly is an architect and she is trying to decide whether to hire Mike, a draftsman, to assist with her work. Kelly could hire Mike at $20 per hour but it would take him three times as long to complete a task as it takes Kelly. Kelly is able to earn $90 per hour and has more architectural jobs than she is able to handle. Which of the following is true?

a. Kelly should not hire Mike because it would be faster for her to do the work herself.

b. Kelly should do the drafting work herself because she has the lower opportunity cost.

c. Mike should be hired at the $20 per hour wage rate.

d. Mike should be hired, but only if he is paid more than $30 per hour.

40. Consider a demand curve for Oreos. If the price of milk decreases while the

price of Oreos stays the same, then I would consume more Oreos because.

a. milk is an inferior good

b. milk is a normal good

c. Oreos and milk are complements

d. Oreos and milk are substitutes

41. If there is a shortageof a good at the current price we expect that

a. the supply curve for the good will shift to the left.

b. the demand curve for the good will shift to the right.

c. the price of the good will rise.

d. the price of the good will fall.

42. WHICH OF THE FOLLOWING IS AN EXAMPLE OF A MICROECONOMIC CHOICE?
A. THE LEGISLATURE HAS VOTED TO ABOLISH THE MINIMUM WAGE IN ALL INDUSTRIES TO TRY TO BOOST EMPLOYMENT LEVELS.
B. THE FOREIGN EXCHANGE RATE IS TOO HIGH, AND HENCE SHOULD BE REDUCED.
C. THE INTEREST RATE HAS BEEN INCREASED IN AN ATTEMPT TO COMBAT HIGH INFLATION.
D.GOOGLE INC. DECIDES TO INVEST MORE IN CELL PHONE RESEARCH BECAUSE IT EXPECTS INCREASED DEMAND FOR CELL PHONES IN THE FUTURE.
43. Comparative advantage implies that you will

a. produce at the highest opportunity cost.

b. produce a good using the most inputs.

c. produce a good only when demand is high

d. produce a good where you have the lowest opportunity cost.

44. If a society savesless now than in the past, then the production possibilities curve will over time

a. shift in.

b. shift out but not as much as in the past.

c.shift out more than in the past.

d. shift in during recessions, and out during expansions.

45. Assume that a family spends 35% of its income on housing, 20% on travel-related expenses, 10% on utilities, 25% on health care and 5% on miscellaneous items. Demand for which category will be most responsive to a change in price?

miscellaneous
health care
utilities
travel related expenses
housing
46. Which of the following is a positive economic statement?

a. Flying first class is better than flying coach class in an airplane.

b. Southwest charges a higher price than American Airlines for any flight from

Philadelphia to Fort Lauderdale.

c. Most airlines charge unfairly high prices.

d. Airlines should require that children sit in a child seat during flights.

47. As illustrated above, the equilibrium price changed to $10 and the equilibrium quantity changed to 100. Suppose that either the demand changed or supply changed, but not both. Which of the following must have occurred?

a. Supply decreased.

b. Supply increased.

c. Demand increased.

d. Demand decreased.

48. Why are economists concerned about finding the point where marginal benefits equal marginal costs?

a. This is the point where scarcity ends.

b. This is where demand exceeds supply.

c. This is where opportunity costs are minimized.

d. This is the point where a decision maker will stop and reevaluate their actions.

49. Consider the famous quote from Adam Smith, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from the regard to their own interest.”This quote best illustrates what important idea in economics?

e. demand

f. opportunity cost

g. rational self-interest

h. rational ignorance

50. Consider the market for ice cream sold by the Berkey Creamery. Which of the following, by itself, is most likely to reduce the equilibrium price, while simultaneously increasing the equilibrium quantity?

a. An increase in the price for store brand ice creams.

b. A reduction in the electricity cost for the Creamery.

c. A reduction in the Penn State tuition.

d. An increase in the income of Penn State students and staff.

51. At a price of $2, the quantity demanded for pens is 12. When the price increases to $3, the quantity demanded for pens is 10. The price elasticity of demand for pens is:

perfectly inelastic.
inelastic.
horizontal.
elastic.
perfectly elastic.
52. Fill in the missing word in the law of demand, “there is a(n) ______ relationship between the price and quantity of the good or service a consumer is willing to buy.”

a. direct

b. indirect

c. inverse

d. dire

53. Bottled water and water filters are substitutes. Which of the following is most likely to cause an increase in demand for water filters (shift the curve to the right)?

a. A decrease in the price of water filters.

b. A decrease in the cost of producing water filters.

c. A decrease in the cost of producing bottled water.

d. An increase in the price of bottled water.

54. According to the law of supply,

a. price and quantity supplied move in the same direction.

b. cost of production and quantity supplied move in the same direction.

c. cost of production and quantity supplied move in opposite directions.

d. price and quantity supplied move in opposite directions.

55. Suppose the income of the residents of State College decreases, while taxi fares remained the same in the area. If this results in an increase in the demand for taxi service, which of the following is most likely true?

a. The scenario described above is not possible.

b. Taxi service is a normal good.

c. Taxi service is an inferior good.

d. Taxi service and private cars are complements.

56. This term refers to the specific components that are excludedfrom a model.

a. caveat emptor

b. ceteris paribus

c. endogenous

d. exogenous

57. Consider the demand for student parking. We move down and to the right alongthe demand curve when

a. the income of the student population increases.

b. the price of gasoline decreases.

c. the price of street parking increases.

d. the price of student parking decreases.

58. Opportunity cost is

a. the lowest valued alternative you sacrifice in choosing another course of action.

b. the highest valued alternative you sacrifice in choosing another course of action.

c. all of the potential alternatives you sacrifice when you choose another course of action.

d. is what you actually decide to do, not what you give up in choosing another option.

59. Identify the positive statement?

a. State College gets 60 inches of snow annually.

b. State College winters seem cold and long.

c. State College looks beautiful after a new snowfall.

d. I’d rather live in State College than in Bismark, North Dakota?

60. Which is the BEST example of Adam Smith’s “invisible hand” principle of self-interest?

i. Dunkin Donuts are better than Krispy Kreme.

j. A driver switches lanes to avoid congestion on the road in front of them.

k. Coke products are unavailable on Penn State’s campus.

l. Suppliers try to make the largest profit they can by charging the highest price possible.

61. Which issue comes from MICROeconomics?

i. The price of a ticket to of a matinee rises from $5.25 to $6.00.

j. The national unemployment rate increased from 4.5 to 4.6% last month.

k. The U.S. savings rate for all of last year was -1.0%.

l. A new trade agreement between China and the United States restricts the use of sweatshops in international trade.

62. Identify the normative statement?

a. Tickets to see the upcoming Cirque du Soleil performance at the BJC are priced from $37 to $67 per person.

b. Seeing a circus performance at the BJC is expensive.

c. Cirque du Soleil began in Quebec in 1984.

d. Cirque du Soleil translates into English as, “circus of the sun” or what we would call a traveling circus performed under a big top tent.

63. Which answer best captures what is happening in the following comic? *

stonesoup050203 – scacity and choice

a. Water is scarce and she must make a choice to buy it.

b. There is a shortage of water.

c. The demand for water is greater than the demand for air.

d. She is paid minimum wage so she cannot afford to pay for water.

64. In the movie, Saving Private Ryan, the soldiers were primarily concerned with

(a) eliminating scarcity in the future.

(b) gaining an absolute advantage in the upcoming battle.

(c) expanding their production possibilities frontier.

(d) the opportunity cost of finding Private Ryan.

65. Which of the following is most likely to increase the equilibrium price charged and increase the equilibrium quantity of customers at Five Guys (a fast casual hamburger and fries restaurant downtown)?

a. An increase in menu prices at the two Backyard Burgers locations in town.

b. McDonald’s decides to renovate, expand and offer a new menu at lower prices.

c. An increase in the wholesale price of the potatoes used to make the fries.

d. A new technology that makes it cheaper to mass-produce hamburgers.

66. In the following comic identify the economic concept at work.

sallyforth021405 – opportunity cost

a. comparative advantage

a. opportunity cost

b. luxury goods

c. consumer surplus

67. Explain what happens to the demand for Pepsi when the price of Coca-Cola rises?

a. There is an increase in the quantity demanded for Pepsi.

b. There is an increase in the demand for Pepsi.

c. The demand for Pepsi is unchanged since the price of Pepsi is the same as before.

d. Pepsi Co. will increase the supply of the product in the market.

68. If a person moves from one point along the top of the production possibility curve to another point along the curve that is closer to the bottom of the curve what can we say about this movement?

a. This is a result of the Law of Decreasing Relative Cost

b. Both of these points are efficient since they are both along the curve.

c. This is a result of the Law of Increasing Relative Cost

d. The point lower on the curve represents inefficiency in the production process.

69. Consider a demand curve for tortilla chips. If the price of salsa decreases while the

price of tortilla chips stays the same, then I would consume more tortilla chips because.

a. salsa is an inferior good

b. salsa is a normal good

c. tortilla chips and salsa are complements

d. tortilla chips and salsa are substitutes

70. Which of the following statements is correct? E = $ matters, I = $ doesn’t matter.

a. The demand for a required textbook is more elastic than the demand for a mystery novel.

b. Beethoven’s recording has more elastic demand than classical music recording in general.

c. Demand for heating oil during the next six years is more inelastic than the demand for heating oil during the next six months.

d. The demand for downloads of Rebecca Black’s Friday is more inelastic today than it will be in six months.

71. If a 5% decrease in price results in 7% increase in quantity demanded of apples, then we know definitely that

a. apples are normal goods.

b. demand for apples is relatively elastic.

c. the price of apples was too high.

d. the price of apples should be reduced further.

72. Dairy Dream, a local ice cream store, finds that they sell out of ice cream sandwiches at the current price of $1. They raise the price to increase their revenues and find that no one buys ice cream sandwiches anymore. The demand for ice cream sandwiches is:

inelastic.
elastic.
perfectly inelastic.
perfectly elastic.
unitary elastic.
(73) Demand is more ELASTIC if

a. the good is inexpensive.

b. it is needed now.

c. the price of the good does not matter.

d. the good has many substitutes.

74.Once-in-a-lifetime experiences have

a. inelastic demand.

b. elastic demand.

c. elastic demand for poor people, but inelastic demand if you are wealthy.

d. inelastic demand for wealthy people, but elastic demand if you are poor.

75. Choose the most INELASTIC good

a. The airplane ticket you buy to attend your grandmother’s funeral

b. a brand new SUV you are thinking of purchasing

c. the new stereo system you buy for your car

d. a vacation you are planning a year in advance.

76. Which curve is the most ELASTIC?

a. Short run demand

b. Long run demand

c. Immediate run demand

d. The demand curve can never be elastic

78. In class, we saw that Penn State could increase tuition and still increase revenue since

a. demand was relatively inelastic

b. demand was relatively elastic

c. demand was unit elastic

d. demand was perfectly elastic

79. Choose the most INELASTIC good

a. The new tires you need to buy so your car can pass state inspection.

b. The new 52’ TV you are thinking of buying.

c. A new tumbler you want to buy to keep your coffee warm.

d. The spring break vacation you are planning.

80. If the demand curve for a product is horizontal, then

a. demand is perfectly elastic.

b. consumers are not responsive to price changes.

c. its price elasticity of demand is equal to 0.

d. consumers will buy a specific amount no matter what the price.

81. Demand will become more INELASTIC if

a. ceteris paribus is violated.

b. the good takes up a relatively large proportion of the person’s budget.

c. there is little time to adjust.

d. many close substitutes for the good exist.

82. The price elasticity of demand is a measure of

a. the responsiveness of the quantity demanded of a good to a changes in the price of the good.

b. the quantity demanded of a good at a given price.

c. the demand for a product holding prices constant.

d. the horizontal shift in the demand curve when the price of a good changes.

83. Given the following information, calculate the elasticity coefficient. The price rises from $8 to $12 and the quantity demanded falls by 40%.

a. –2

b. –1

c. 0

d. +1

84. Choose the most elastic good

e. a flight you take to visit your dying grandmother

f. your allergy medication

g. electricity

h. a vacation you are planning on taking to Cancun, Mexico next year

(85) Here are the lyrics from If I Die Young by The Band Perry.

If I die young, bury me in satin
Lay me down on a bed of roses
Sink me in the river at dawn
Send me away with the words of a love song

So put on your best boys and I’ll wear my pearls
What I never did is done
A penny for my thoughts, oh no, I’ll sell them for a dollar
They’re worth so much more after I’m a goner

What does the band suggest will happen to their thoughts?

a. The demand will increase.

b. The quantity demanded will increase.

c. The supply will increase.

d. The quantity supplied will increase.

86. Consider the market for apples which is in equilibrium as shown below:

(1)

(2)

Show what happens (on the graph above) when (1) the cost of pesticides for apple growers increases and (2) the price of oranges (a substitute) increases.

87. You are considering going to Austin, TX to visit friends. The plane trip takes 10 hours round trip and costs $600. A bus trip takes 50 hours round trip and costs $200. At what hourly rate would you be indifferent between taking the bus and the plane?

88. Given the following production table, and the law of comparative advantage we discussed in class, who should produce the arrows?

Aphrodite

Cupid

Arrows

Chocolates

Arrows

Chocolates

0

12

0

16

2

9

6

12

4

6

12

8

6

3

18

4

8

0

24

0

89. If we define an equation for demand, Qd = 240 – 12P and an equation for supply, Qs = 60 + 6P. Determine the equilibrium price and output in the market.

90. If demand increases and at the same time supply increases what will happen to price and output?

92. Consider a market with demand function, Qd = 500 – 3P and supply function,

Qs = –100 + 3P.Determine the equilibrium price and output in this market.

93. Stewie and Brian work at a store that repairs watches and clocks. The production possibilities of Stewie and Brian are given in the table below.

Stewie

Brian

Watches

Clocks

Watches

Clocks

0

20

0

24

2

15

4

18

4

10

8

12

6

5

12

6

8

0

16

0

Based on our discussion in class of absolute and comparative advantage, which of the following statements is true? (Check the correct response.)

Stewie – Watches (20/8 = 2.5), Clocks (8/20 = 0.4)
Brian – Watches (24/16 = 1.5), Clocks (16/24 = 0.66)

Brian should repair both clocks and watches since he has an absolute advantage in both.

Brian should repair watches because he has a comparative advantage in repairing watches.

Brian should repair clocks because he has a comparative advantage in repairing clocks.

94. If demand increases and at the same time supply decreases what will happen to equilibrium price and quantity?

95. Complete the list of the factors that shift the demand curve:

1. Changes in income.

2. Changes in tastes and preferences.

3. Changes in expectations about the future.

4. Changes in _________________.

96. The graph below shows the PPC for computers and cheese in the USA. Suppose some of the US dairy farmers decide to migrate to Switzerland. Draw a new PPC that reflects this change.

97. Given the following production table, and the law of comparative advantage we discussed in class, who is the low opportunity cost producer of pranks?

Magic Tricks

Pranks

Magic Tricks

Pranks

0

8

0

4

4

6

2.5

3

8

4

5

2

12

2

7.5

1

16

0

10

0

98. Greyhound decides to increase its price of the trip from State College to New York from $45 to $55 because rising gas prices. It finds that quantity demanded fell from 2500 passengers per week to 1500. Calculate the price elasticity of demand? -2.5

99. Jay Pa enjoys eating a Zola’s. He would eat there four times a month if the cost were $25 per meal. However, if the price were $50 a meal he would only be able to go twice a month. Calculate his price elasticity of demand? (Make sure you get the sign of the coefficient right.)

100. The State College Spikes stadium’s concession stands previously sold hot dogs for $2 apiece. At that price, when a baseball fan went to watch a baseball game, he bought 1 hotdogs. But now that the stadium has a “dollar-a-dog night,” he has purchased 2 hot dogs for the new price of $1. What is the approximate value of this individual’s price elasticity of demand for hot dogs?

a. -0.64

b. -0.80

c. -1.00

d. -1.56

101. When Heavenly Cookies prices its sugar cookies at $1, they sell 75 cookies. They lowered the price to $0.50 and sold 200 cookies. Their total revenue________ because the price elasticity of demand for sugar cookies is ________.

rose: elastic
rose: inelastic
fell: elastic
fell: inelastic