The current price floor in the agricultural lettuce market makes it such that price of lettuce is 25% higher than equilibrium price and 100 heads of lettuce are demanded
Assuming that the elasticity of demand for lettuce is -0.50, what would be the equilibrium price and quantity of lettuce if the government removed the current price floor?
A) Price = 0.875, Quantity = 125
B) Price = 1, Quantity = 112.5
C) Price = $0.75, Quantity = 112.5
D) Price = $0.75, Quantity = 125
C
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Universities A and B are substitutes in the minds of many college students. Initially the student tuition at each university is the same and far below the equilibrium tuition. Then, the tuition at A is raised and B is not. As a result of a rising tuition at A, some students who would have applied and enrolled in A, apply to B instead. Based on the logic presented in one of the theories discussed
in the textbook, we would expect that A) instructors at B will begin to be less nearly punctual for office hours than they were previously. B) instructors at A will begin to be more nearly punctual for office hours than they were previously. C) instructors at B will be more nearly punctual for office hours than they were previously. D) a and b E) b and c
Refer to the following graph.
FH is the ________, which tells us how much of good B must be exchanged on ________ market to obtain an additional good A
A. consumption possibilities curve; domestic B. production possibility curve; domestic C. production possibility curve; world D. consumption possibilities curve; world