Economics Answers

If the level of technology used in the production of a good improves, and assuming the quality of the good does not change, then:

To protect consumers from potentially dangerous manufactured goods, the U.S. government is most likely to use which kind of trade barrier?

If the level of technology used in the production of a good improves, and assuming the quality of the good does not change, then:

The Great Wall of China attracts millions of tourists every year, with many vendors selling goods at key tourist destination points. During summer, the vendors all sell icy cold bottled water. Assume the market for bottled water is perfectly competitive. Ji is a vendor in this market who sells 77 bottles (her profit-maximising quantity) at the market price of $2, with the average total cost being $2.10 per bottle. The minimum average variable cost is $1.70 per bottle.
Answer the following questions:

a.Ji’s economic profit or loss is __ (use a negative value if a loss). Answer in dollars, rounded to two decimal places (ie: to the nearest cent).

b.Should Ji shut down? Type Y for Yes or N for No.

c.State whether the following statement is true or false: "Ji needs to minimise her loss of $0.10 per bottle by producing the quantity where price equals her marginal cost." Type t for true, or f for false .

1.McDonald's recent technological innovations have allowed them to reduce the marginal cost of their burgers while the market price remained unchanged. Assume the market for McDonald's burgers is perfectly competitive.
Which of the following statements are true:

Marginal revenue per burger will be lower.

Marginal revenue per burger will be unchanged.

The demand for burgers, faced by a particular store, will no longer be perfectly elastic.

The profit maximising quantity of burgers will be where the marginal cost equals the burger price.

The Dubai Gold Souk consists of over 300 stores in a specific area that all sell jewellery. The products sold by each store are identical.

1.The price for each product in the stores is determined in part by market demand.

2.To maximise profit or to minimise losses, a store should determine what quantity to produce using the rule P=MC.

3.Demand in this market is perfectly elastic.

Which of the following statements are true:
Only 1 is true.
Only 2 is true.
Both 1 and 2 are true.
Both 2 and 3 are true.
All three are true.

1. The Federal Government is in the process of building a National Broadband Network, which will increase the internet upload and download speeds across Australia. An independent cost benefit analysis has been conducted. It was estimated that at a price of $80 per month, demand for a new high speed broadband would be 93% of the market, while at a price of $115 per month, demand would be 67% of the market. It cannot be assumed that the demand curve is linear.

Calculate the midpoint price elasticity of demand for the high speed broadband. Round your answer to the nearest two decimal places, giving a positive value for elasticity.

1. Consider the musical, Les Miserables, is currently playing at the Lyric Theatre in QPAC (Queensland Performing Arts Centre). QPAC knows at the current price, the point elasticity of demand for tickets is 0.18.
Select the item from the list provided to make the following statements true.

If the demand for seats were perfectly inelastic, then the value of elasticity along the demand curve would be equal to __________.

A 1% increase in the price of tickets to see Les Miserables would lead to a __________% decrease in the quantity of tickets demanded.

Les Miserables is recognised as being a popular and critically acclaimed musical. Some people will pay almost anything for a ticket to go to a performance. Economists would see the ticket purchased by these people as being a __________ good.
1. Budget
2. 1
3. greater
4. 0.18
5. necessary
6. increase
7. luxury
8. 0
9. decrease
10. time
11. substitute
12. demand

1. There are many businesses selling flowers in Brisbane on any given day. A flower shop sells a basic bouquet for $24.99 and sells, on average, 10 bouquets per day. The flower shop decides to decrease the price of the basic bouquet to $20.99 and sells 18 bouquets that day.
Which of the following statements are true (to four decimal places):

The point price elasticity of demand for the basic bouquet of flowers at a price of $24.99 is 4.9980

The point price elasticity of demand for the basic bouquet of flowers at a price of $24.99 is 1.2495.

A 1% increase in the price of a basic bouquet would lead to a 1.2495% decrease in the quantity of basic bouquets demanded.

A 1% decrease in the price of a basic bouquet would lead to a 1.2495% increase in the quantity of basic bouquets demanded.

Thousands of tourists visit Paris every year to see the Eiffel Tower. When the price of admission to the Eiffel Tower was 9 Euros, approximately 6.9 million people visited the tower every year. The French government knows that if they decided to increase the price to 10 Euros, demand to visit the Eiffel Tower would reduce by 0.1 million people.
1.If the demand curve is taken to be linear, it would slope downwards at a rate of 10 Euros/million people.
2.Most tourists consider the Eiffel tower as a "must-see tourist attraction". This could explain why a relatively large percentage increase in the price of admission led to a relatively smaller percentage decrease in tickets demanded.
3.If the demand for admission to the Eiffel Tower is taken to be linear, the point elasticity of demand would be inelastic at every point along the entire demand curve.
Which of the following statements are true:
Only 1 is true.
Only 2 is true.
Both 1 and 2 are true.
Both 2 and 3 are true.
All three are true.