Steve sells hotdogs from a vending cart downtown. The table above shows his daily total revenues at four different prices. Between which two prices is the demand for hotdogs
a. elastic?
b. unit elastic?
c. inelastic?
a. Steve's demand is elastic between $1.50 and $1.75. In this range, when Steve raises his price from $1.50 to $1.75 per hot dog, his total revenue falls, which means that the demand is elastic.
b. Steve's demand is unit elastic between $1.25 and $1.50. In this range, when Steve raises his price from $1.25 to $1.50 per hot dog, his total revenue does not change, which means that the demand is unit elastic.
c. Steve's demand is inelastic between $1.00 and $1.25. In this range, when Steve raises his price from $1.00 to $1.25 per hot dog, his total revenue rises, which means that the demand is inelastic.
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A decrease in the price level will lead to
A) a decrease in the real interest rate and an increase in net exports. B) an increase in the real interest rate and an increase in net exports. C) a decrease in the real interest rate and a decrease in net exports. D) an increase in the real interest rate and a decrease in net exports.
The market demand that is NOT met by other sellers in a market is known as a firm's
A) excess demand curve. B) market demand curve. C) residual demand curve. D) leftover demand curve.
Law of Supply and Demand
What will be an ideal response?
Before an uneven rise in prices Allan consumed 5 bread and 6 juice. After the price increase and with an increased welfare payment from the government Allan consumes 4 bread and 7 juice. Does the government payment represent a true cost-of-living adjustment (COLA)?
A) Yes, if the two consumption bundles lie on the same indifference curve. B) Yes, if the second bundle yields more utility than the first. C) No, the first bundle is clearly preferred. D) Not enough information.