Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 3, Problem 5QP
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Comparison between snob effect and the
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Which of the following is the best example of the concept of demand?
Your car breaks down and you consider how to deal with the fact that you no longer have transportation
Since you cannot get to school today, you are considering skipping class
You are thinking about getting a new car, and really like the new Ford Bronco.
You really like the new Ford Bronco, but don't have the $45,000 to buy one, so instead, you decide to get a used SUV that costs $15,000.
None of the above is a good example of demand.
One day, a local theme park charges $40 per person for admission, and 10,000 people visit the park. On another day, the park
charges $60 per person, and 20,000 people pay to enter the park.
Which explanation best describes why the park sees an increase in attendance when the price is higher?
Theme-park tickets are part of a rare class of goods which do not follow the Law of Demand.
High prices signal a high quality park experience.
The higher price gives the park an incentive to expand capacity and permit more visitors.
The low-attendance day falls on an autumn Wednesday, while the high-attendance day falls on a summer Saturday.
If the price of X decreases and this decreases the demand for Y, then
Chapter 3 Solutions
Macroeconomics
Ch. 3.1 - Prob. 1STCh. 3.1 - Prob. 2STCh. 3.1 - Prob. 3STCh. 3.1 - Prob. 4STCh. 3.2 - Prob. 1STCh. 3.2 - Prob. 2STCh. 3.2 - Prob. 3STCh. 3.3 - Prob. 1STCh. 3.3 - Prob. 2STCh. 3.3 - Prob. 3ST
Ch. 3.3 - Prob. 4STCh. 3.3 - Prob. 5STCh. 3 - Prob. 1QPCh. 3 - Prob. 2QPCh. 3 - Prob. 3QPCh. 3 - Prob. 4QPCh. 3 - Prob. 5QPCh. 3 - Prob. 6QPCh. 3 - Prob. 7QPCh. 3 - Prob. 8QPCh. 3 - Prob. 9QPCh. 3 - Prob. 10QPCh. 3 - Prob. 11QPCh. 3 - Prob. 12QPCh. 3 - Prob. 13QPCh. 3 - Prob. 14QPCh. 3 - Prob. 15QPCh. 3 - Prob. 16QPCh. 3 - Prob. 17QPCh. 3 - Prob. 18QPCh. 3 - Prob. 19QPCh. 3 - Prob. 20QPCh. 3 - Prob. 21QPCh. 3 - Prob. 22QPCh. 3 - Prob. 23QPCh. 3 - Prob. 24QPCh. 3 - Prob. 25QPCh. 3 - Prob. 26QPCh. 3 - Prob. 27QPCh. 3 - Prob. 28QPCh. 3 - Prob. 1WNGCh. 3 - Prob. 2WNGCh. 3 - Prob. 3WNGCh. 3 - Prob. 4WNGCh. 3 - Prob. 5WNGCh. 3 - Prob. 6WNGCh. 3 - Prob. 7WNGCh. 3 - Prob. 8WNGCh. 3 - Prob. 9WNG
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- The State government is considering building a new highway. Linda lives near the proposed highway. Her demand for trips per month is given by Q = 60 - 0.5P, where Q is the number of trips and P is the average cost per trip in cents. The current average cost per trip is 60 cents, and the new highway is expected to reduce it to 40 cents. A legislator asks Linda how much she is willing to pay per month for the construction of the new highway. Linda: I am making 30 trips now when it costs me $0.60 per trip. With the new highway, the cost will be reduced to $0.40, so I am willing to pay up to 30 (0.6 - 0.4) = $6 per month. Do you agree with her reasoning?arrow_forwardConsider the markets for widgets and cogs. You study survey data and observe that if widgets cost $5, then 100 widgets are demanded. You also observe that if widgets cost $3, then 150 cogs are demanded and if widgets cost $4 then 100 cogs are demanded. Given the information, determine and explain which types of elasticity of demand you are able to calculate, and then calculate using the two types of methods to calculate elasticity of demand. After calculating, please interpret the calculations.arrow_forwardRefer to the table below to answer the questions. Use the mid- point formula. $4 10 B 8 F Demand 1 2 3 4 5 Number of gardenburgers 4.1) If the price of a gardenburger increases from RM8 to RM10, the price elasticity of demand equals and demand is 4.2) If the price of a gardenburger increases from RM6 to RM8, the price elasticity of demand equals and demand is 4.3) If the price of a gardenburger decreases from RM7 to RM6, the price elasticity of demand equals results in a(n). 4.4) If the price of a gardenburger decreases from RM9 to RM8, the price elasticity of demand equals , and the decrease in total revenue. and demand is 4.5) If the price of a gardenburger decreases from RM8 to RM7, the price elasticity of demand equals and demand is 4.6) If the price of a gardenburger increases from RM7 to RM9, the price elasticity of demand equals results in a(n). and the increase in total revenue. E. 6. %24 Pricearrow_forward
- YOU JUST GOT FIRED FROM YOUR JOB AS A LAWYER AND YOUR SAVINGS IS ALMOST DEPLETED. AS A RESULT, WHAT WILL HAPPEN TO YOUR DEMAND FOR LUXURY GOODS SUCH AS WATCHES AND DESIGNER CLOTHES? IN WHICH DIRECTION WILL THE DEMAND CURVE SHIFT?arrow_forwardWhich of the following is most likely to have a low price elasticity of demand? A good that is very expensive. A good with no close substitutes. A good that most people consider a luxury. All are equally likely to have a low price elasticity of demand.arrow_forwardSuppose that, in an attempt to entice citizens to conserve energy, the government enacted regulations requiring that all air conditioners be more efficient in their use of electricity. After this regulation was implemented, government officials were then surprised to discover that people used even more electricity than before. Using the concept of price elasticity, which of the following statements best explains how this increase might have occurred? multiple choice Because the regulation effectively reduced the price of cool air, consumers with sufficiently elastic demand might have bought substantially more of it. There is no way the observed change could have occurred if all consumers were fully informed, self-interested, and rational. The government ignored the possibility that the demand curve for electricity might be upward sloping. In practice, people often pay little attention to the relevant costs and benefits when deciding how much of a good, like electricity,…arrow_forward
- What is wrong with this statement? Demand refers to the willingness of buyers to purchase different quantities of a good at different prices during a specific time period.arrow_forwardAssume that you work in a movie theater and you want to increase revenue at the theater after the pandemic. The pandemic has caused people to find many activities that are alternatives to going to the movie theater. Fill in the blanks below with the words that best complete the sentences: Because consumers have found more substitutes for going to the movie theater, price elasticity of demand for movie tickets is more likely to be [ elastic or inelastic ]. Because of this price elasticity of demand, you should [increase or decrease] the price of movie tickets if you want to increase revenue.arrow_forwardThe rent for apartments in New York City has been rising sharply. Demand for apartments in New York City has been rising sharply as well. This is hard to explain because the law of demand says that higher prices should lead to lower demand. Do you agree or disagree? Explain your answer.arrow_forward
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