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    Quiz 4 ch4

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    mohamed hagag
    This document contains a quiz on managerial economics concepts. It includes 5 multiple choice questions testing concepts like elasticity, price controls, and supply and demand equilibrium. It also includes 2 problems to solve involving the wheat and coffee markets. The wheat problem asks to find the equilibrium price and quantity, and then calculate the farm surplus and government cost if a price floor is implemented. The coffee problem calculates the price elasticity of demand and determines if demand is elastic or inelastic, and the impact on revenues of a 10% price increase.

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    © All Rights Reserved
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    Quiz 4 ch4

    Uploaded by

    mohamed hagag
    12 views2 pages
    This document contains a quiz on managerial economics concepts. It includes 5 multiple choice questions testing concepts like elasticity, price controls, and supply and demand equilibrium. It also includes 2 problems to solve involving the wheat and coffee markets. The wheat problem asks to find the equilibrium price and quantity, and then calculate the farm surplus and government cost if a price floor is implemented. The coffee problem calculates the price elasticity of demand and determines if demand is elastic or inelastic, and the impact on revenues of a 10% price increase.

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    economic quiz

    Original Title

    Quiz 4 ch4 (1)

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    © © All Rights Reserved

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    This document contains a quiz on managerial economics concepts. It includes 5 multiple choice questions testing concepts like elasticity, price controls, and supply and demand equilibrium. It also includes 2 problems to solve involving the wheat and coffee markets. The wheat problem asks to find the equilibrium price and quantity, and then calculate the farm surplus and government cost if a price floor is implemented. The coffee problem calculates the price elasticity of demand and determines if demand is elastic or inelastic, and the impact on revenues of a 10% price increase.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    12 views2 pages

    Quiz 4 ch4

    Uploaded by

    mohamed hagag
    This document contains a quiz on managerial economics concepts. It includes 5 multiple choice questions testing concepts like elasticity, price controls, and supply and demand equilibrium. It also includes 2 problems to solve involving the wheat and coffee markets. The wheat problem asks to find the equilibrium price and quantity, and then calculate the farm surplus and government cost if a price floor is implemented. The coffee problem calculates the price elasticity of demand and determines if demand is elastic or inelastic, and the impact on revenues of a 10% price increase.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Managerial Economics Keti Tskhadadze

    Quiz N4
    Name and Surname Mohamed sobhy attia attia hagag

    True/False (Each question is worth of 0.2 points):


    1. Elasticity: the percentage change in one variable relative to a percentage change in another. True

    2.An example of a nonlinear demand curves is one with constant elasticity. false

    Tests:
    3. The price elasticity of demand is a measure of
    A) the responsiveness of the quantity demanded to price changes.
    B) the quantity demanded at a given price.
    C) the shift in the demand curve when price changes.
    D) the demand for a product holding price constant.

    4. The minimum wage is an example of a government imposed


    A) price control.
    B) price ceiling.
    C) price floor.
    D) Both A and B
    E) Both A and C

    Tasks Solving:
    5. Demand and supply in the wheat market are given by:

    QD = 2000 - 1000 P and QS = -500 + 1000 P


    QD= QS
    2000-1000 p=--500+1000p
    2500=2000p
    P = 1.25
    qs= -500+1000(1)
    P = 500

    wher
    e Q is millions of bushels and P is price per bushel.

    a. Find the equilibrium price and quantity.


    QD= QS
    2000-1000 p=--500+1000p
    2500=2000p
    P = 1.25
    Managerial Economics Keti Tskhadadze
    Quiz N4
    QD= 2000-1000X1.25
    = 750

    b. Suppose that the government wishes to support farm income and thus sets a price floor of $1.50/bushel.
    Find the size of the farm surplus.

    c. What is the cost of this program to the government?

    6. The initial price of a cup of coffee is $1, and at that price, 400 cups are demanded. If the price falls to $0.90, the
    quantity demanded will increase to 500.

    a. Calculate the (arc) price elasticity of demand for coffee.


    Price elasticity of demand= (400-500)/450) / ( .90- 1) /,95) =.22/ .1= 2.2
    b. Based on your answer, is the demand for coffee elastic or inelastic? elastic
    c. Based on your answer to a., if the price of coffee is increased by 10%, what will happen to the revenues from
    coffee? Carefully explain how you know.

    As the result of above If the price increase 10% the revenues will decrease by 22% because the demand of
    market will decrease by 22%

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