Docsity
Docsity

Prepare for your exams
Prepare for your exams

Study with the several resources on Docsity


Earn points to download
Earn points to download

Earn points by helping other students or get them with a premium plan


Guidelines and tips
Guidelines and tips

Review for the First Test - Principles of Microeconomics | ECN 143, Exams of Microeconomics

Material Type: Exam; Class: PRINC OF MICROECONOMICS; Subject: Economics; University: University of Alabama - Huntsville; Term: Unknown 1989;

Typology: Exams

Pre 2010

Uploaded on 07/22/2009

koofers-user-yrf
koofers-user-yrf 🇺🇸

10 documents

1 / 2

Toggle sidebar

This page cannot be seen from the preview

Don't miss anything!

bg1
ECN 143
In class review for the first test
A. What happens to price and quantity sold when the following events take
place? Assume the product is a normal good and the substitute product is a
competitor’s product (a substitute good on the demand side).
1. Production costs decrease and consumer incomes increase.
2. Production costs increase and population increases.
3. More firms enter the market and the price of a substitute good
increases.
4. The price of a substitute good decreases.
pf2

Partial preview of the text

Download Review for the First Test - Principles of Microeconomics | ECN 143 and more Exams Microeconomics in PDF only on Docsity!

ECN 143

In class review for the first test A. What happens to price and quantity sold when the following events take place? Assume the product is a normal good and the substitute product is a competitor’s product (a substitute good on the demand side).

  1. Production costs decrease and consumer incomes increase.
  2. Production costs increase and population increases.
  3. More firms enter the market and the price of a substitute good increases.
  4. The price of a substitute good decreases.

B. Calculate the following price and income elasticities

  1. If the price of cigarettes is expected to increase from $1.60 a pack to $2.40 a pack next year and the price elasticity of demand for cigarettes is .6, by how much should sales change next year in percent?
  2. If personal income is expected to increase by 7% in Huntsville next year and the income elasticity for haircuts is .8, how much should the number of haircuts change next year in percent?
  3. If the price of orange juice increases from $2.60 a quart to $2.80 a quart and the number of quarts sold decreases from 30 million to 26 million, what is the price elasticity of demand for orange juice?
  4. The price of beer increases by 5% and the number of bottles of wine cooler sold increases by 10%. What is the cross price elasticity of wine coolers with respect to beer?