Question

TRUE, FALSE

1. T F The Google Pixel is often seen as a close substitute for the Apple iPhone. When thee Pixel first came out on the market, we would expect the demand curve for iPhones to become steeper.

2. T F A firm can always choose the quantity of labor (L) to use in the short run.

3. T F If firm’s production technology follows the law of diminishing returns, the slope of the production function will always be decreasing.

MULTIPLE CHOICE

1. Which of the following are determinants of the price elasticity of demand? Select all that apply.

(a) the availability of substitutes (b) the cost of inputs to the production process (c) the spending share of the budget (d) whether the good is a necessity

2. If the elasticity of demand for Good A is -3, a 33 percent decrease in quantity demanded of Good A results from a(n) in the price of Good A.

(a) 99 percent decrease (b) 99 percent increase (c) 11 percent decrease (d) 11 percent increase (e) 33 percent decrease

3. Suppose that demand for a good is given by QD = 3m − 2P where m is income and P is the price of the good. When the price is $5 and the quantity demanded is 20, the price elasticity of demand is

(a) −2 (b) −10 (c) − 1 2 (d) 3 2 (e) impossible to calculate without also knowing what m is.

Answer 1

mcd 0 B lost of input is the deberminant of D Ad -- 3 - ? Dino supply. Din price 7. Din pris - Bind ²33_11 An increase in price of 11%. do=3mral - Es - DODP | or , - 15 Taullhalse Tome