Answered: 1. The X-Corporation produces a good…

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter6: Elasticity

Section: Chapter Questions

Problem 10QP

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1. The X-Corporation produces a good (called X) that is a normal good. Its competitor, Y-Corp., makes a substitute good that it markets under the name “Y. ”Good Y is an inferior good. How will the demand for good X change if consumer incomes increase? * a. Increase b. Decrease 2. The X-Corporation produces a good (called X) that is a normal good. Its competitor, Y-Corp., makes a substitute good that it markets under the name “Y. ”Good Y is an inferior good. How will the demand for good Y change if consumer incomes increase? * a. Increase b. Decrease 3. The X-Corporation produces a good (called X) that is a normal good. Its competitor, Y-Corp., makes a substitute good that it markets under the name “Y. ”Good Y is an inferior good. How will the demand for good X change if the price of good Y decreases ? * a. Increase b. Decrease 4. The X-Corporation produces a good (called X) that is a normal good. Its competitor, Y-Corp., makes a substitute good that it markets under the name “Y. ”Good Y is an inferior good. Is good Y a lower-quality product than good X ? * a. Yes b. No 5. Good X is produced in a competitive market using input A. Explain what would happen to the supply of good X if the price of input A increases. * a. Increase b. Decrease c. None of the above 6. Good X is produced in a competitive market using input A. Explain what would happen to the supply of good X if an excise tax of P 1 is imposed on good X . * a. Increase b. Decrease c. None of the above 7. Good X is produced in a competitive market using input A. Explain what would happen to the supply of good X if an ad valorem tax of 5% is imposed on good X . * a. Increase b. Decrease c. None of the above 8. Good X is produced in a competitive market using input A. Explain what would happen to the supply of good X if a technological change reduces the cost of producing additional units of X . * a. Increase b. Decrease c. None of the above 9. Suppose the supply function for product X is given by QxS = - 50 + 0.5Px - 5Pz. How much of product X is produced when Px $500 and Pz $30? * a. - 50 b. +50 c. 150 d. None of the above 10. An economist estimated the cross-price elasticity for peanut butter and jelly to be 1.5 . Based on this information , we know the goods are * a. inferior goods b. complements c. inelastic d. substitutes

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