2023 1 The price of pens increases from 2 to 2 20 At the same | Assignments Online

 

 

1) The price of pens increases from $2 to $2.20. At the same time, the quantity of pens demanded decreases from 100 to 90. Demand for pens is:

A) perfectly inelastic.

B) inelastic.

C) unitary elastic.

D) elastic.

 

2) Suppose the price of a box of pop tarts is $3. If Michael is willing to pay $4 for that box of pop tarts, his consumer surplus is:

A) $0.

B) $1.

C) $2.

D) $3.

 

3) Joe runs a business and needs to decide how many hours to stay open. Figure 2.2 illustrates his marginal benefit of staying open for each additional hour. Suppose that Joe’s marginal cost of staying open per hour is $24. How many hours should Joe stay open?

A) 3 hours

B) 4 hours

C) 5 hours

D) 6 hours

 

4) Assume that you have a monthly fixed income of $ 1500 and has $50 of your income allocated to buy pizza and ice cream. Suppose that there is a decrease in the price for pizza and in the price for ice cream, this will shift:

A) indifference curves to the left.

B) indifference curves to the right.

C) the budget line to the left.

D) the budget line to the right.