On April 1, the price of gas at Bob's Corner Station was $4.95 per gallon. On May 1, the price was $5.45 per gallon. On June 1, it was back down to $4.95 per gallon. Between April 1 and May 1, Bob's price increased by or Between May 1 and June 1, Bob's price decreased by , or Suppose that at a gas station across the street, prices are always 20% higher than Bob's. In absolute dollar terms, the difference between Bob's prices and the prices across the street is when gas costs $5.45 than when gas costs $4.95. Some economists blame high commodity prices (including the price of gas) on interest rates being too low. Suppose the Fed raises the target for the federal funds rate from 2% to 2.75%. This change of percentage points means that the Fed raised its target by approximately

On April 1, the price of gas at Bob's Corner Station was $4.95 per gallon. On May 1, the price was $5.45 per gallon. On June 1, it was back down to $4.95 per gallon. Between April 1 and May 1, Bob's price increased by or Between May 1 and June 1, Bob's price decreased by , or Suppose that at a gas station across the street, prices are always 20% higher than Bob's. In absolute dollar terms, the difference between Bob's prices and the prices across the street is when gas costs $5.45 than when gas costs $4.95. Some economists blame high commodity prices (including the price of gas) on interest rates being too low. Suppose the Fed raises the target for the federal funds rate from 2% to 2.75%. This change of percentage points means that the Fed raised its target by approximately

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which of the following changes explains why the equilibrium price of a good would decrease and the quantity would increase? A)Increase in supply B)Increase in demand C)Decrease in demand D)Decrease in supply
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The table below shows the weekly demand for machine screws at the local hardware store. Demand for Machine Screws Price (dollars per pack) $5.00 Quantity (packs of 100 screws) 4.50 25 4.00 85 3.50 145 3.00 205 2.50 2.00 265 325 385 445 1.50 1.00 0.50 505 0.00 565 Instructions: Round your answers to 2 decimal places. If you are entering a negative number include a minus sign. a. Using the starting point method, what is the price elasticity of demand from a price of $4.50 to a price of $4.00 per pack of 100 screws? b. Using the starting point method, what is the price elasticity of demand from a price of $2.50 to a price of $2.00 per pack of 100 screws? c. Using the starting point method, what is the price elasticity of demand from a price of $1.00 to a price of $0.50 per pack of 100 screws?
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Question 9 Suppose the figure below shows the market demand for coffee. Suppose the price of tea, a substitute good, increases. Which of the following changes would occur? Price D2 D1 Quantity O a shift from D1 to D2 O a movement along D2 from point A to point B O a shift from D2 to D1 O a movement along D2 from point B to point A
Consider two markets: the market for motorcycles and the market for pancakes. The initial equilibrium for both markets is the same, the equilibrium price is $4.50, and the equilibrium quantity is 29.0. When the price is $7.75, the quantity supplied of motorcycles is 65.0 and the quantity supplied of pancakes is 103.0. For simplicity of analysis, the demand for both goods is the same. Using the midpoint formula, calculate the elasticity of supply for pancakes. Please round to two decimal places.
QUESTION 7 To mark national burger day there is a nationwide 50% sale on burgers during May. A recent survey, of those who bought burgers at supermarkets and food trucks, found that 99% of people will only eat burgers in a bun. Which of the following statements are true: The decrease in the price of burgers during May will cause a decrease in the quantity demanded of burgers. The decrease in the price of burgers in May will cause an increase in both demand and quantity demanded for buns. The decrease in the price of burgers in May will only result in an increase in the quantity demanded for buns. Economic theory is unable to predict if there would be any shift in demand for buns with the discount on burgers in May.
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Consider the demand for shrimp shown in Figure 2. Suppose the current demand for shrimp is D (in black), the current price of a pound of shrimp is $10, and the current quantity demand for shrimp is 200K. Which of the following correctly describes the effect of a decrease in the price of a pound of shrimp? A) The price of a pound of shrimp falls to $3, the demand curve shifts left to D'' (red), and the quantity demand for shrimp remains at 200K pounds. B) The price of a pound of shrimp falls to $3, the demand curve remains at D (black), and the quantity demand for shrimp decreases to 150K pounds. C) The price of a pound of shrimp falls to $3, the demand curve shifts right to D' (blue), and the quantity demand for shrimp increases to 270K pounds. D) The price of a pound of shrimp falls to $3, the demand curve remains at D (black), and the quantity demand for shrimp increases to 270K.