University:
Whitman College
Course:
ECON-101 | Principles of Microeconomics
Academic year:

2020
Views:

124

Pages:

4
Author:

Alma Stephenson

Sophia Microeconomics Unit 2 - Challenge 2 Pedro had type I diabetes and had to remember to maintain normal levels of blood glucose, whether that required insulin injections, snacking on sugary foods or eating whole wheat bagels and fruit. Pedro did not prefer any particular fruit over another. If a certain type of fruit was on sale, he would always choose the sale price. When it comes to sugary snacks and whole wheat bagels, there were certain brands that he liked to have more than others, and he might spend a little more money to get the brands he preferred. His diabetes medication (insulin) was an item that he couldn't live without, and Pedro would always purchase it, regardless of the price. Which of the following items would be a more elastic demand for Pedro? a.) Diabetes medication (insulin) b.) Sugary snacks d.) Whole wheat bagels Diet Coke has an elasticity of demand of 1.6, which makes it a.) perfectly inelastic b.) inelastic d.) perfectly elastic One month ago, Olivia purchased 300 pages of printer paper at $1 per sheet. Today she learned that the price of the printer paper had risen to $1.50 per sheet, so she purchased only 100 sheets. 1.50 1.00 100 300 Using the graph of printer paper elasticity below and the midpoint formula, the own-price elasticity is a.) -1 c.) 0.5 d.) 1.25 If the cross-price elasticity of demand is positive, the goods are said to be Substitutes b.) complements c.) inferior d.) normal Juan raised the price of a certain brand of running shorts in his store from $30 to $35. Once he did this, Juan noticed that customers were purchasing fewer shirts to go with the shorts. Last week, he sold 40 shirts, which decreased to 20 after the price increase with the shorts. Using the mid-point formula, the cross-price elasticity is and the goods are a.) -0.23; complements b.) 0.05; substitutes c.) 1.04; substitutes 4.33, compleme Which of the following would be considered a luxury good? a.) Eating breakfast at the local diner on Saturdays with an income elasticity of 0.85. b.) Purchasing dining hall passes for weekday meals with an income elasticity of 0.15. c.) Saving money by shopping at the local thrift store to find a dress with an income elasticity of -1. Benting a limous y of Ashley received a raise at work that increased her monthly income from $1,000 to $1,250. Last year, Ashley bought 20 slices of cheesecake for her birthday party. Due to her increase in income, she is able to buy 24 slices for her birthday this year. Using the mid-point formula, the income elasticity is and the cheesecake slices are goods. a.) 0.5; normal b.) 1.3; luxury 0.8 normal d.) 1.2; luxury

Sophia Microeconomics Unit 2 Challenge 2

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