Assignment Instructions/ Description
Image transcription textM Dra | M Inb | Age | Vin | DS. | M Ser | The | & Cos | Vali | |Exis | s Shc| Be: | My| (46 | @ City | Qu | Hol | 9 Ma | log|DEL X & Lal | 2 Lau | Orc * Col | My | 7 Lez | NOW Em | Wo | w|Do | +
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Midterm Exam
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Therese Folefac: Attempt 1
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Question 8 (7 points)
For a good with the following demand:
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Quantity
Price
Demanded
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9
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6000
$20
14,000
$15
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(a) Calculate the price elasticity of demand using the Midpoint Method.
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(b) Is the demand for this good considered elastic or inelastic?
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(c) Do you think it is more likely that the average consumer will consider this good a
necessity or a luxury? How did you determine your answer?
(d) If sellers' production costs rise, will they be able to pass these higher costs onto
the buyers in the form of higher prices? Explain.
A
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7/20/2023... Show moreImage transcription textM Dra | M Inb | Age | Vin | DS. | M Ser | The | & Cos | Vali | |Exis | s Shc| Be: | My| (46 | @) City | Qu | Hol | 9 Ma | log|DEL X & Lal| 2 Lau | Orc * Col | My | 7 Lez | NIU Em | Wo | w|Do | +
X
- -> C a https://brightspace.ccc.edu/d21/Ims/quizzing/user/attempt/quiz_start_frame_auto.d21?ou=252173&isprv=&drc=0&qi=832583&cfql=0&dnb=0&fromQB=0&inProgress=1
Midterm Exam
X
Therese Folefac: Attempt 1
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Question 9 (5 points)
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Paula sells boomerangs. In attempt to increase sales, she discounts the price of
boomerangs by 15%. As a result of the sale, she finds that her revenues fall from
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$220,000 from the previous month to $180,000.
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(a) Based on this information, would you estimate that the price elasticity of demand
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for boomerangs is elastic or inelastic?
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(b) Briefly (in 1-2 sentences) explain why the sale failed to increase her revenue.
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(c) The local government decides to start taxing boomerangs. If the price elasticity of
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supply of boomerangs is 1.6, who will pay more of the tax: buyers or sellers?
(d) How can you determine whether buyers or sellers will pay a greater share of the
tax?
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7/20/2023... Show moreImage transcription textM Dra | M Inb | Age | Vin | DS. | M Ser | The | & Cos | Vali | |Exis | s Shc | Be: | My | (46 | @ City | Qu | Hol | 9 Ma | log|DEL X & Lal | 2 Lau | Orc * Col | & My | 7 Lez | NIU Em | Wo | w |Do | +
X
- -> C a https://brightspace.ccc.edu/d21/Ims/quizzing/user/attempt/quiz_start_frame_auto.d21?ou=252173&isprv=&drc=0&qi=832583&cfql=0&dnb=0&fromQB=0&inProgress=1
Midterm Exam
X
Therese Folefac: Attempt 1
Page 1:
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Question 10 (8 points)
Saved
Use the values for a perfectly competitive firm below to answer the questions:
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Price Quantity
Total Cost
Fixed Cost
Variable Cost
$10
2000
$24,000
$8000
$16,000
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(a) Should this firm shut down in the short run? Explain why or why not in 1-4
sentences.
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(b) Assume this firm's total costs do not change in the long run. Should this firm exit
in the long run?
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(c) Are your answers to (a) and (b) different? Explain why in 1-4 sentences.
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Question 11 (6 points) Saved
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Use table to find the required values:
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7/20/2023... Show moreImage transcription textM Dra | M Inb | Age | Vin | DS. | M Ser | The | & Cos | Vali | |Exis | s Shc| Be: | My| (46 | ) City | Qu | Hol | 9 Ma | log|DEL X & Lal | 2 Lau | Orc * Col | My | 7 Lez | NOW Em | Wo | w|Do | +
X
- -> C a https://brightspace.ccc.edu/d21/Ims/quizzing/user/attempt/quiz_start_frame_auto.d21?ou=252173&isprv=&drc=0&qi=832583&cfql=0&dnb=0&fromQB=0&inProgress=1
Midterm Exam
X
Therese Folefac: Attempt 1
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Question 11 (6 points) Saved
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Use table to find the required values:
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Price
$32
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Quantity
400,000
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Explicit costs
$3,500,000
Implicit costs
$4,100,000
(A) Calculate total revenue.
(B) Calculate accounting profit.
(C) Calculate economic profit.
A
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7/20/2023... Show moreImage transcription textM Dra | M Inb | Age | Vin | DS. | M Ser | The | & Cos | Vali | |Exis | s Shc| Be: | My| (46 | @) City | Qu | Hol | 9 Ma | log|DEL X & Lal | 2 Lau | Orc * Col | My | 7 Lez | NOW Em | Wo | w|Do | +
X
- -> C a https://brightspace.ccc.edu/d21/Ims/quizzing/user/attempt/quiz_start_frame_auto.d21?ou=252173&isprv=&drc=0&qi=832583&cfql=0&dnb=0&fromQB=0&inProgress=1
Midterm Exam
X
Therese Folefac: Attempt 1
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2
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Question 12 (6 points)
Saved
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Based on the table below for a perfectly competitive firm:
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Quantity Fixed Cost
Variable Total
Marginal Cost
Cost
Cost
10
200
50
250
20
200
100
300
5
30
200
300
500
20
40
200
800
1000
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(a) Find the marginal cost as X.
(b) If the equilibrium price is $20, find the profit maximizing quantity.
(c) How much profit will the firm earn?
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