When many passengers are flying from the United States to any country in Europe they have choices to make. Why do you think flying a Business class is more elastic that flying an economy coach in the same aircraft?

Is there an economic case of banning short selling in the United States?

Suppose that an employee at a coffee shop is willing to work 30 hours per week when she is paid $12.00 per hour. When she is offered a raise to $14.00 per hour, she is willing to work 40 hours per week. Her price elasticity of supply is (Note: use the midpoint method and give your answer to two decimal places.)

You provide your services primarily to educational providers, helping them understand how much to charge for their schooling. Imagine that there two types of consumer – high revenue (H) and low revenue (L). Assume demand is given by PL = 1,000–QL/10 and PH = 2,500 – 2QH. In both equations, quantity is in hours of consulting provided. The marginal and average total cost of providing an hour of consulting is $50 per hour. a. Suppose you cannot see who is an H and who is a L, and you can only charge one price. What price do you charge, and how many units do you sell? b. Now imagine you can charge different prices for different quantities, e.g., quantity discounts. Propose a pricing “schedule” (that is, what prices you would offer under what quantity rules) that will allow you to earn greater profit than you would in part a. State how many hours of consulting are sold to each type of consumer.

An increase in the supply of a good is expected to have what effect on its price? What will be the effect on the demand for substitutes?

In 2014, the Seattle Seahawks won the Super Bowl. Draw a supply and demand graph for Seahawk tickets in the following season to show the impact of the Super Bowl win.  (It would be the same graph for Seahawk t-shirts, hotdogs at the game and beer.)

A government report comes out saying that drinking tea daily has great health benefits. This will cause the price of tea to [Select] and the quantity of tea bought and sold to [Select]

Say whether the following statement makes Good Economic Sense, is Complete Economic Nonsense, or is Somewhere In Between: “The products for which demand is the greatest will also be the products that are the most profitable to produce.”

Multiple Choice O O O D2 to D1 D3 to D1 Point b to point A Point a to point b