CHAPTER 15: Market Demand
MULTIPLE CHOICE
1. In Problem 1, suppose every Buick owner’s demand for gasoline is 20 − 5p for p less than or equal to
4 and 0 for p 4. Every Dodge owner’s demand is 15 − 3p for p less than or equal to 5 and 0 for p 5.
Suppose that Gas Pump, South Dakota, has 100 Buick owners and 200 Dodge owners. If the price of
gasoline is $3.50, what is the total amount of gasoline demanded in Gas Pump?
a.
2,300 gallons
b.
575 gallons
c.
1,725 gallons
d.
1,150 gallons
e.
None of the above.
2. In Problem 1, suppose every Buick owner’s demand for gasoline is 20 − 5p for p less than or equal to
4 and 0 for p 4. Every Dodge owner’s demand is 15 − 3p for p less than or equal to 5 and 0 for p 5.
Suppose that Gas Pump, South Dakota, has 100 Buick owners and 150 Dodge owners. If the price of
gasoline is $3.50, what is the total amount of gasoline demanded in Gas Pump?
a.
1,850 gallons
b.
1,387.50 gallons
c.
462.50 gallons
d.
925 gallons
e.
None of the above.
3. In Problem 1, suppose every Buick owner’s demand for gasoline is 20 − 5p for p less than or equal to
4 and 0 for p 4. Every Dodge owner’s demand is 15 − 3p for p less than or equal to 5 and 0 for p 5.
Suppose that Gas Pump, South Dakota, has 100 Buick owners and 100 Dodge owners. If the price of
gasoline is $3, what is the total amount of gasoline demanded in Gas Pump?
a.
550 gallons
b.
1,100 gallons
c.
2,200 gallons
d.
1,650 gallons
e.
None of the above.
4. In Problem 1, suppose every Buick owner’s demand for gasoline is 20 − 5p for p less than or equal to
4 and 0 for p 4. Every Dodge owner’s demand is 15 − 3p for p less than or equal to 5 and 0 for p 5.
Suppose that Gas Pump, South Dakota, has 100 Buick owners and 200 Dodge owners. If the price of
gasoline is $4.25, what is the total amount of gasoline demanded in Gas Pump?
a.
225 gallons
b.
675 gallons
c.
450 gallons
d.
900 gallons
e.
None of the above.
5. In Problem 1, suppose every Buick owner’s demand for gasoline is 20 − 5p for p less than or equal to
4 and 0 for p 4. Every Dodge owner’s demand is 15 − 3p for p less than or equal to 5 and 0 for p 5.
Suppose that Gas Pump, South Dakota, has 100 Buick owners and 250 Dodge owners. If the price of
gasoline is $4, what is the total amount of gasoline demanded in Gas Pump?
a.
1,500 gallons
b.
375 gallons
c.
1,125 gallons
d.
750 gallons
e.
None of the above.
6. In Problem 5, the demand function for drangles is given by D(p) = (p + 1)−2. If the price of drangles is
$11, then the price elasticity of demand is
a.
−7.33.
b.
−3.67.
c.
−5.50.
d.
−0.92.
e.
−1.83.
7. In Problem 5, the demand function for drangles is given by D(p) = (p + 1)−2. If the price of drangles is
$8, then the price elasticity of demand is
a.
−3.56.
b.
−5.33.
c.
−0.89.
d.
−7.11.
e.
−1.78.
8. In Problem 5, the demand function for drangles is given by D(p) = (p + 1)−2. If the price of drangles is
$3, then the price elasticity of demand is
a.
−0.75.
b.
−3.
c.
−4.50.
d.
−6.
e.
−1.50.
9. In Problem 5, the demand function for drangles is given by D(p) = (p + 1)−2. If the price of drangles is
$20, then the price elasticity of demand is
a.
−0.95.
b.
−7.62.
c.
−5.71.
d.
−3.81.
e.
−1.90.
10. In Problem 5, the demand function for drangles is given by D(p) = (p + 1)−2. If the price of drangles is
$4, then the price elasticity of demand is
a.
−0.80.
b.
−6.40.
c.
−3.20.
d.
−4.80.
e.
−1.60.
11. In Problem 6, the only quantities of good 1 that Barbie can buy are 1 unit or zero units. For x1 equal to
zero or 1 and for all positive values of x2, suppose that Barbie’s preferences were represented by the
utility function (x1 + 10)(x2 + 12). Then if her income were $4, her reservation price for good 1 would
be
a.
$2.91.
b.
$6.50.
c.
$1.45.
d.
$.83.
e.
$1.10.
12. In Problem 6, the only quantities of good 1 that Barbie can buy are 1 unit or zero units. For x1 equal to
zero or 1 and for all positive values of x2, suppose that Barbie’s preferences were represented by the
utility function (x1 + 6)(x2 + 4). Then if her income were $16, her reservation price for good 1 would
be
a.
$2.86.
b.
$2.50.
c.
$5.71.
d.
$1.50.
e.
$.57.
13. In Problem 6, the only quantities of good 1 that Barbie can buy are 1 unit or zero units. For x1 equal to
zero or 1 and for all positive values of x2, suppose that Barbie’s preferences were represented by the
utility function (x1 + 6)(x2 + 8). Then if her income were $20, her reservation price for good 1 would
be
a.
$4.50.
b.
$.75.
c.
$8.
d.
$4.
e.
$1.23.
14. In Problem 6, the only quantities of good 1 that Barbie can buy are 1 unit or zero units. For x1 equal to
zero or 1 and for all positive values of x2, suppose that Barbie’s preferences were represented by the
utility function (x1 + 12)(x2 + 8). Then if her income were $36, her reservation price for good 1 would
be
a.
$3.38.
b.
$6.77.
c.
$1.50.
d.
$4.50.
e.
$.57.
15. In Problem 6, the only quantities of good 1 that Barbie can buy are 1 unit or zero units. For x1 equal to
zero or 1 and for all positive values of x2, suppose that Barbie’s preferences were represented by the
utility function (x1 + 10)(x2 + 4). Then if her income were $12, her reservation price for good 1 would
be
a.
$2.50.
b.
$1.45.
c.
$2.91.
d.
$2.50.
e.
$.30.
16. In the same football conference as the university in Problem 9 is another university where the demand
for football tickets at each game is 100,000 − 8,000p. If the capacity of the stadium at that university is
60,000 seats, what is the revenue-maximizing price for this university to charge per ticket?
a.
$6.25
b.
$5
c.
$12.50
d.
$3.13
e.
$18.75
17. In the same football conference as the university in Problem 9 is another university where the demand
for football tickets at each game is 60,000 − 8,000p. If the capacity of the stadium at that university is
40,000 seats, what is the revenue-maximizing price for this university to charge per ticket?
a.
$3.75
b.
$1.88
c.
$7.50
d.
$2.50
e.
$11.25
18. In the same football conference as the university in Problem 9 is another university where the demand
for football tickets at each game is 180,000 − 10,000p. If the capacity of the stadium at that university
is 100,000 seats, what is the revenue-maximizing price for this university to charge per ticket?
a.
$4.50
b.
$9
c.
$8
d.
$18
e.
$27
19. In the same football conference as the university in Problem 9 is another university where the demand
for football tickets at each game is 80,000 − 4,000p. If the capacity of the stadium at that university is
50,000 seats, what is the revenue-maximizing price for this university to charge per ticket?
a.
$10
b.
$5
c.
$7.50
d.
$20
e.
$30
20. In the same football conference as the university in Problem 9 is another university where the demand
for football tickets at each game is 160,000 − 12,000p. If the capacity of the stadium at that university
is 90,000 seats, what is the revenue-maximizing price for this university to charge per ticket?
a.
$6.67
b.
$13.33
c.
$5.83
d.
$3.33
e.
$20
21. In Problem 9, the demand for tickets is given by D(p) = 200,000 − 10,000p, where p is the price of
tickets. If the price of tickets is $10, then the price elasticity of demand for tickets is
a.
−2.
b.
−1.50.
c.
−3.
d.
−0.50.
e.
−1.
22. In Problem 9, the demand for tickets is given by D(p) = 200,000 − 10,000p, where p is the price of
tickets. If the price of tickets is $8, then the price elasticity of demand for tickets is
a.
−0.33.
b.
−1.33.
c.
−1.
d.
−2.
e.
−0.67.
23. In Problem 9, the demand for tickets is given by D(p) = 200,000 − 10,000p, where p is the price of
tickets. If the price of tickets is $8, then the price elasticity of demand for tickets is
a.
−1.33.
b.
−2.
c.
−0.33.
d.
−1.
e.
−0.67.
24. In Problem 9, the demand for tickets is given by D(p) = 200,000 − 10,000p, where p is the price of
tickets. If the price of tickets is $18, then the price elasticity of demand for tickets is
a.
−27.
b.
−18.
c.
−13.50.
d.
−4.50.
e.
−9.
25. In Problem 9, the demand for tickets is given by D(p) = 200,000 − 10,000p, where p is the price of
tickets. If the price of tickets is $15, then the price elasticity of demand for tickets is
a.
−6.
b.
−9.
c.
−4.50.
d.
−1.50.
e.
−3.