Answer to Question #89854 in Microeconomics for dharminder

Question

Part 1: Multiple Choice Questions [1 point each]
1. When will buyers of a product pay the majority of a tax placed on a product?
a. when supply is more elastic than demand
b. when demand is more elastic than supply
c. when the tax is placed on the seller of the product
d. when the tax is placed on the buyer of the product
2. Harry's Candy shop’s total monthly revenue increased from $1,000 to $2,000 when its quantity sold rises from 100 to 300 candies a month. What is the price elasticity of demand for Harry's candies?
a. 2.318
b. 0.395
c. 2.530
d. 1.816
3. Which best represents the concept represented by the adage “There is no such thing as a free lunch”
a. Melissa can only attend the concert if she takes her sister with her.
b. Greg is hungry and homeless.
c. Brian must repair the tire on his bike before he can ride it to class.
d. Kendra must decide between going to Miami or Cancun for spring break.

Answer 1

1. a.
2. Ed = (300 - 100)/(6.67 - 10)*(6.67 + 10)/(300 + 100) = -2.5. So, the correct answer is c.
3. c.