Micro Unit 3 c

Promoters of a rock group know that if they charged $8 a ticket, 400 people would buy tickets for a concert, and if they charged $4 a ticket, 800 people would buy tickets. Over this price range, the demand for the concert tickets for the rock group is

• Elastic

• Inelastic

• Unit elastic

• Perfectly elastic

• Perfectly inelastic

Which of the following is most likely to shift the demand for aircraft mechanics to the right?

• An increase in the demand for air travel

• An increase in the price of a license necessary for aircraft mechanics

• A decrease in the price of a license necessary for aircraft mechanics

• A decrease in the demand or air travel

• A decrease in the marginal productivity of aircraft mechanics

The quantity of peanuts supplied increased from 40 tons per week to 60 tons per week when the price of peanuts increased from $4 per ton to $5 per ton. The price elasticity of supply for peanuts over this price range is

• elastic

• inelastic

• unit elastic

• perfectly elastic

• perfectly inelastic

A city transit authority increases the price of subway and bus tickets from $1.25 to $1.50. If the demand for these tickets is price inelastic, the number of people riding buses and subways and the city's revenues will most likely change in which of the following ways?

• Number of People Riding Increase, City's Revenues Increase

• Number of People Riding Decrease, City's Revenues Increase

• Number of People Riding Decrease, City's Revenues Decrease

• Number of People Riding Decrease, City's Revenues Remain Constant

• Number of People Riding Remain Constant, City's Revenues Increase

Which of the following is true when the production of a good results in negative externalities?

• The government must produce the good.

• The private market will produce too little of the good.

• The private market price will be too low.

• The government must prevent the production of the good.

• Private firms will not be able to maximize profits.

There are negative externalities associated with the use of a freeway in a major city at rush hour because during this time

• drivers slow down other drivers because of the high traffic volume

• drivers value their time more

• government revenues from toll roads increase

• revenues of bus companies increase

• gasoline costs more