# Answer of the below questions

Figure 4.2 illustrates the supply and demand for t-shirts. If the actual price of t-shirts is \$10, we would expect that
If the demand for one good decreases when the price of another good increases, the two goods are ________ goods.

Suppose that in October the price of a cup of cafe latte was \$2.50 and 400 lattes were consumed. In November the price of a latte was \$2.00 and 600 lattes were consumed. What might have caused this change?

Bananas and apples are substitutes. When the price of bananas rises, and a technological advance in apple production occurs at the same time

If the price elasticity of supply is inelastic, which of the following could be a possible value of the elasticity?

Suppose that the elasticity of demand for newspapers is 2.0 and quantity demanded decreases by 40%. What must the percentage increase in price have been?

If the number of highway deaths among young people is roughly proportional to their beer consumption and young peoples’ elasticity of demand for beer is 1.5, then to decrease highway deaths of young people by 15 percent, taxes would need to be increased enough to increase the price of beer by:

A small change in a variable is
Recall the Application about the experiment in which Chinese factory workers were divided into groups and offered bonuses for their production output to answer the following question(s).
The results of the experiment discussed in this Application show the differences in productivity from the threat of having a bonus taken away for not meeting a production target and the promise of receiving a bonus for meeting a production target. These results describe the economic concept of

Jerome has a “C” average in his philosophy course and a “B” average in his economics course. He decides to study an extra hour for his philosophy exam. This is an example of

If you work 4 extra hours, and the slope of the curve showing the relationship between your income and work hours is 8, your income will increase by

Walking up an escalator as opposed to standing still on an escalator makes sense if the ________ of walking is less than the ________ of walking.

Suppose that your tuition to attend college is \$14,000 per year and you spend \$5,000 per year on room and board. If you were working full time, you could earn \$26,000 per year. What is your opportunity cost of attending college?

Recall the Application about the impact inflation has on your potential future salary and the repayment of student loans to answer the following question(s).
According to this Application, if you earn a salary of \$80,000 in the first year and all prices decrease by half in the next 5 years, what will your nominal annual salary be in 5 years?

You borrow money to buy a house in 2007 at a fixed interest rate of 6.5 percent. By 2010, the inflation rate has steadily fallen to 2.5 percent from the recent high of 4.0 percent in 2007. Considering only your mortgage, is inflation good news or bad news for you?

Bath Groom 0 6 7 5 13 4 18 3 22 2 25 1 27 0
Table 2.1
Kaitlyn and Larissa have formed a dog bathing and grooming business. The number of dogs they can bathe or groom in any given day is depicted in Table 2.1. As they groom more dogs, the opportunity cost of grooming additional dogs
Hair Pins /hour Bandanas /hour Nigel 4 10 Mia 9 3

Table 3.3
Consider two individuals, Nigel and Mia, who produce hair pins and bandanas. Nigel’s and Mia’s hourly productivity are shown in Table 3.3. Which of the following is true?

The phenomenon which occurs when markets do not produce the most efficient outcome on their own is known as

Table 3.2
Consider two individuals, Jesse and April, who hand paint kites and snowboards. Table 3.2 shows how much of each good Jesse and April can paint in one hour. Which of the following is true?

Consider two individuals, Jesse and April, who hand paint kites and snowboards. Table 3.2 shows how much of each good Jesse and April can paint in one hour. Which of the following is true?