Exam 14: Market Demand

At the price of $100, tourists demand 267 airplane tickets. At the same price, business travelers demand 237. At the price $110, tourists demand 127 tickets and business travelers demand 127. Assuming that the demand curves of business travelers and tourists are both linear over this price range, what is the price elasticity of demand at the price $100?

Harry's demand function for blueberries is x = 20 - p, where p is the price and x is the quantity demanded. If the price of blueberries is 3, then what is Harry's price elasticity of demand for blueberries?

The inverse demand function for soybeans is p = 30,000 - 6q. Total revenue in this market will be maximized when the quantity of soybeans produced is

The only quantities of good 1 that Barbie can buy are 1 unit or 0 units. For x₁ equal to 0 or 1 and for all positive values of x₂, suppose that Barbie's preferences were represented by the utility function (x₁ + 8)(x₂ + 16). Then if her income were $4, her reservation price for good 1 would be

The demand curve for a good is given by p = 60 - 8q, where p is the price and q is the quantity of the good. Suppose that the number of consumers in the economy doubles; a "clone" of each consumer, who has exactly the same demand curve as the original consumer, appears. The demand curve for the doubled economy is described by

An economy has 100 consumers of type 1 and 200 consumers of type 2. If the price of the good is less than $10, then each type 1 consumer demands 10 - p units of the good; otherwise each type 1 demands zero. If the price of the good is less than 8, then each type 2 demands 24 - 3p; otherwise each type 2 demands zero. If the price of the good is 6, then the total amount of the good demanded will be

Suppose that the inverse demand function for wool is p = for some constant A. Suppose that of the world's wool is produced in Australia. a. If Australian wool production increases by 1% and the rest of the world holds its output constant, what will be the effect on the world price of wool? b. How does the marginal revenue to Australia from an extra unit of wool relate to the price of wool?

If the price of leeks falls by $2 per pound, then the demand for leeks will rise by 10 pounds. Therefore we can conclude that the demand for leeks is elastic.

The demand for drangles is given by D(p) = (p + 1)^-2, where p is the price of drangles. If the price of drangles is $20, then the price elasticity of demand for drangles is

If the demand function is , where m is income and p is price, then the absolute value of the price elasticity of demand decreases as price increases.

When the price of bananas is 50 cents a pound, the total demand is 100 pounds. If the price elasticity of demand for bananas is -2, what quantity would be demanded if the price rose to 60 cents a pound?

If the elasticity of demand curve for buckwheat is -1.25 at all prices higher than the current price, we would expect that when bad weather reduces the size of the buckwheat crop, total revenue of buckwheat producers will fall.

If the equation for the demand curve is q = 50 - 4p, then the ratio of marginal revenue to price is constant as price changes.

If the demand function is q = m - 2(ln p) over some range of values of p, then at all such values of p, the absolute value of the price elasticity of demand

The demand function for small business computers in the United States is given by x = 200 - 10p, where x is annual sales measured in thousands of computers and p is the price of a computer measured in thousands of dollars. Japanese firms supply a big share of these computers. They measure prices in yen where 150 yen equal 1 dollar. The price of 1 computer is $10,000. Let E_u be the price elasticity of demand at this price as calculated by US firms who measure in dollars, and let E_j be the price elasticity of demand at the same $10,000 price but measured in yen by the Japanese firms. Which of the following are the values of E_u and E_j, respectively?

A firm faces a demand function D(p), for which the revenue-maximizing price is $16. The demand function is altered to 2D(p). What is the new revenue-maximizing price?

A person with a quasilinear utility function will

If there are only two goods, an increase in the price of good 1 will increase the demand for good 2

The only quantities of good 1 that Barbie can buy are 1 unit or 0 units. For x₁ equal to 0 or 1 and for all positive values of x₂, suppose that Barbie's preferences were represented by the utility function (x₁ + 4)(x₂ + 18). Then if her income were $16, her reservation price for good 1 would be

The demand function is described by the equation q(p) = 30 - . The inverse demand function is described by the equation