Suppose that the elasticity of demand for a product is 0.5 and price decreases by 20%. By what percentage will quantity demanded increase?
A. 0.5%
B. 5%
C. 10%
D. 40%
Answer: C
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The demand for microwaves in a certain country is given by: D = 8,000-30P, where P is the price of a microwave. Supply by domestic microwave producers is: S = 4,000 + 10P. If this economy opens to trade while the world price of a microwave is $50, and the government imposes a tariff of $30 per microwave, then this country will ________ microwaves.
A. export B. import 400 C. import 800 D. export 800
Refer to Table 6-5. Katie Graham owns a kayak rental service in Santa Barbara. Table 6.5 shows her estimated demand schedule for kayak rentals per week. She would like to increase her sales revenue by changing the price she charges for rentals
At present she charges $75. Based on the information in the table, Katie A) should raise her price to $80 to increase her revenue because the demand for kayak rentals is price inelastic. B) should raise her price to earn the most revenue. C) should lower her price to $60 to increase her revenue because the demand for kayak rentals is price elastic. D) is not able to increase her revenue by changing her price because the demand for kayak rentals is unit elastic.
You are the Minister of Trade for a small island country with the following annual PPC:
You are negotiating a trade agreement with a neighboring island with the following annual PPC: 
If you offer to give the other island 1 coconut for every 4 fish they give you, then they will:
A. refuse your offer because they can produce as many coconuts as you can. B. accept your offer because their opportunity cost of a coconut is greater than 4 fish. C. accept your offer because your opportunity cost of a coconuts is less than 4 fish. D. refuse your offer because they have a comparative advantage in fish.
Frank owns an apple farm and plans to spend 4 hours today picking apples. The number of apples he can pick per hour depends on the total number of hours he spends working in either the east orchard or the west orchard in the manner shown in the accompanying table below.Hours in East OrchardNumber of Apples Per HourHours in West OrchardNumber of Apples Per Hour140110232210325310420410 What is the marginal benefit to Frank of the 2nd hour he spends picking in the east orchard?
A. 32 apples B. 8 apples C. 24 apples D. 64 apples