If the supply curve slopes upward and a 3 per unit tax on suppliers raises the profit-maximizing price by 3, demand must be perfectly inelastic.
a. True
b. False
QUESTION 2When demand is elastic, an increase in price will lead to an increase in total revenue
a. True
b. False
QUESTION 3It has been suggested that if NHL hockey teams would lower ticket prices, they could increase revenue from ticket sales. Which of the following assumptions forms the basis for this suggestion?
a. Both d and e are correct.
b. All of the following are correct.
c. Demand for NHL hockey is income inelastic.
d. Demand for NHL hockey is price elastic.
e. There are many substitutes for NHL hockey.
QUESTION 4A government-imposed price floor above the market price of milk would increase consumers' expenditures on milk only if
a. demand is elastic
b. supply is inelastic
c. demand falls
d. demand is inelastic
e. supply is unit elastic
QUESTION 5Suppose consumers spent 42 million on Christmas trees last year when the average tree cost 30 and this year spent 42 million when the average tree costs 25 . Assuming nothing else changed, this data suggests that
a. consumers bought the same number of Christmas trees this year as last year
b. the price of Christmas trees stayed the same
c. total revenues to tree producers rose this year
d. the demand for trees is unit elastic
e. the demand for trees is inelastic
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