Suppose a consumer views a red pencil as a perfect substitute for a blue pencil. Suppose the supply of a red pencil has a positive slope. Suppose the prices of red and blue pencils are, pr and PB. What would happen if the government taxed only red pencils. What would happen if there were only red pencils? What would happen if there were only blue pencils?

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When the price of good Y increases from $2 to $3, the quantity demanded for good X decreases from 20 units to 10 units. Calculate the cross-price elasticity of demand between goods X and Y. (Round all decimal calculations to the closest ten- thousandths so your percentages are rounded to the closest hundredths; round your final answer to the closest hundredths.) Are goods X and Y complements or substitutes?

Suppose the government imposes a $3 excise tax on the sale of sweaters in Alaska by charging suppliers $3 for each sweater sold. Using economic analysis, we would predict that: the price of sweaters will increase but by less than $3 consumers of sweaters will bear the entire amount of the tax the price of sweaters will decrease by $3 the price of sweaters will increase by $3 From the lecture video on elasticity, suppose a surfboard producer was considering lowering the price of surfboards in order to increase total revenues. Under what conditions would this idea work?) Always, because when producers lower price, consumption increases. This is the Law of Demand. When the elasticity of demand is inelastic. When the elasticity of demand is elastic. When the elasticity of demand is -0.58.

Two drivers – Tom and Jerry – each drive up to a gas station. Without looking at the price of gas, each one places an order with the pump attendant. Tom says, “I’d like 10 gallons of gas.” Jerry says, “I’d like $10 of gas.” What is each driver’s price-elasticity of demand for gas (give the Ed-value for each)?

Consider two markets: the market for cat food and the market for dog food. The initial equilibrium for both markets is the same, the equilibrium price is $4.50, and the equilibrium quantity is 31.0. When the price is $8.75, the quantity supplied of cat food is 75.0 and the quantity supplied of dog food is 105.0. For simplicity of analysis, the demand for both goods is the same. Using the midpoint formula, calculate the elasticity of supply for dog food. Please round to two decimal places.

If income elasticity of demand for a good is positive, we say that good is a normal good.  You can use the following approach to calculate the income elasticity of demand for a good: Group of answer choices   % change in quantity supplied / % change in income   % change in income / % change in quantity demanded   % change in quantity demanded / % change in income   % change in quantity demanded / % change in income tax rates

INFO: Yesterday, the price of envelopes was $3 a box, and Julie was willing to buy 10 boxes. Today, the price has gone up to $3.75 a box, and Julie is now willing to buy 8 boxes. What is Julie’s elasticity of demand? _____ (Hint: only a number goes here) Is Julie's demand for envelopes elastic or inelastic? Explain your answer in a complete sentence(s) here:

If a strong economic recovery boosts average incomes, what would happen to the equilibrium price and quantity of a normal good and of an inferior good? The equilibrium price and quantity of a normal good would rise; those of an inferior good would fall. of a normal good would fall; those of an inferior good would rise. of a normal good would rise; those of an inferior good would also rise. of a normal good would fall; those of an inferior good would also fall.

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