Question 1

The average home in Hong Kong is much smaller in size than in Australia. How is the difference related to land being more expensive in Hong Kong?

Accepted Answer

C

Question 2

Fields can be ploughed with human labor, animal power, or fuel-burning machines. Explain how the choice among the methods of ploughing depends on worker wages.

Accepted Answer

All the statements are correct in explaining how the choice of ploughing method depends on worker wages. Human ploughing is labor-intensive and thus more viable where wages are low. Mechanized ploughing becomes more cost-effective as wages increase, reducing the reliance on human labor.

Question 3

Customers for prepaid mobile telephone service pay a lump sum price for a fixed quantity of usage. Customers for post-paid service enter into a contract that stipulates a monthly subscription charge and price per unit of usage. Customers of pre-paid service tend to consume and spend less than customers of post-paid mobile service. Fill in the blanks: ______ service is an inferior product and ______ service is a normal product.

Accepted Answer

An inferior product is one whose demand decreases as consumer income increases, which aligns with prepaid service since consumers with lower income or those looking to spend less opt for it. A normal product is one whose demand increases with an increase in consumer income, fitting the description of post-paid service, as it is often chosen by consumers with higher income or those willing to spend more on mobile services.

Question 4

Explain the relations among the demands for warehouse workers and stock-picking machines (machines to lift workers to access stocks at height).

Accepted Answer

Warehouse workers and stock-picking machines are complements because the machines assist workers in accessing stocks at height, enhancing their efficiency and productivity.

Question 5

How would a switch from gasoline-powered to electric cars affect the demands for: (i) Spark plugs and (ii) Tires?

Accepted Answer

Electric cars do not require spark plugs, reducing their demand. However, electric vehicles tend to be heavier due to their batteries, potentially increasing tire wear and demand. Additionally, the convenience of charging may encourage more driving, further increasing tire demand.

Question 6

Tesla and NIO produce only electric cars. How would advertising by Tesla affect the demand for (i) electric cars in general, and (ii) NIO cars?

Accepted Answer

The answer of Tesla and NIO produce only electric cars....

Question 7

Suppose that a food delivery service cuts its commission. How would consumers respond and how would they benefit?

Accepted Answer

When a food delivery service cuts its commission, it often leads to lower prices for consumers. This can result in consumers ordering more food deliveries because of the reduced cost (A). They benefit directly from the lower commission on orders they would have placed anyway, effectively saving money on each order (B). Additionally, as consumers are likely to order more due to the lower prices, they also benefit from these additional orders, either by enjoying more variety or by making more frequent purchases than they would have otherwise (C).

Question 8

Luna Supplies offers to lease a plotter on a 12-month contract for a basic rental of $500 per month plus a fee of $10 per A1-sized plot. Consider a customer who prints 50 plots a month. What is their (i) average and (ii) marginal cost per plot?

Accepted Answer

The average cost per plot is ($500 + $10*50) / 50 = $20, and the marginal cost per plot is $10.

Question 9

The below figure depicts Maggie's demand for car rental. Suppose that the car rental agency sets a two-part price including a usage fee of 20 cents per mile. How much can the agency charge for the fixed payment?

Accepted Answer

The answer of The below figure depicts Maggie's demand for...

Question 10

The following figure depicts the market demand for gasoline. Suppose that the price of gasoline rises from US$2 to US$3 per gallon. Which areas represent the changes in (i) expenditure, and (ii) buyer surplus?

Accepted Answer

The answer of The following figure depicts the market demand...

Question 11

The average home in Hong Kong is much smaller in size than in Australia. How is the difference related to land being more expensive in Hong Kong?

Accepted Answer

The answer of The average home in Hong Kong is...

Question 12

Fields can be ploughed with human labor, animal power, or fuel-burning machines. Explain how the choice among the methods of ploughing depends on worker wages.

Accepted Answer

The answer of Fields can be ploughed with human labor,...

Question 13

Customers for prepaid mobile telephone service pay a lump-sum price for a fixed quantity of usage. Customers for post-paid service enter into a contract that stipulates a monthly subscription charge and price per unit of usage. Customers of prepaid service tend to consume and spend less than customers of post-paid mobile service. Apply the concepts of normal and inferior products to prepaid and post-paid service.

Accepted Answer

The answer of Customers for prepaid mobile telephone service pay...

Question 14

Explain the relations among the demands for electric cars, batteries, and charging stations.

Accepted Answer

The answer of Explain the relations among the demands for...

Question 15

How would a switch from gasoline-powered to electric cars affect the demands for: (a) Gasoline. (b) Spark plugs. (c) Tires. (d) Car washes?

Accepted Answer

The answer of How would a switch from gasoline-powered to...

Question 16

Tesla and NIO produce only electric cars. How would advertising by Tesla affect the demand for NIO cars?

Accepted Answer

The answer of Tesla and NIO produce only electric cars....

Question 17

Suppose that a food delivery service cuts its commission. How would consumers respond and how would they benefit?

Accepted Answer

The answer of Suppose that a food delivery service cuts...

Question 18

Luna Supplies offers to lease a plotter on a 12-month contract for a basic rental of $500 per month plus a fee of $10 per A1-sized plot. (a) Explain this pricing strategy as a two-part price. (b) Consider a customer who prints 50 plots a month. What is their average and marginal cost per plot?

Accepted Answer

The answer of Luna Supplies offers to lease a plotter...

Question 19

The below figure depicts Maggie's demand for car rental. Suppose that the car rental agency sets a two-part price including a usage fee of 20 cents per mile. How much can the agency charge for the fixed payment?

Accepted Answer

The answer of The below figure depicts Maggie's demand for...

Question 20

The following figure depicts the market demand for gasoline. Suppose that the price of gasoline rises from US$2 to US$3 per gallon. Which areas represent the changes in (a) expenditure, and (b) buyer surplus?

Accepted Answer

The answer of The following figure depicts the market demand...

Quiz 2: Demand

The average home in Hong Kong is much smaller in size than in Australia. How is the difference related to land being more expensive in Hong Kong?

Fields can be ploughed with human labor, animal power, or fuel-burning machines. Explain how the choice among the methods of ploughing depends on worker wages.

Explain the relations among the demands for warehouse workers and stock-picking machines (machines to lift workers to access stocks at height) .

How would a switch from gasoline-powered to electric cars affect the demands for: (i) Spark plugs and (ii) Tires?

Tesla and NIO produce only electric cars. How would advertising by Tesla affect the demand for (i) electric cars in general, and (ii) NIO cars?

Suppose that a food delivery service cuts its commission. How would consumers respond and how would they benefit?

Luna Supplies offers to lease a plotter on a 12-month contract for a basic rental of $500 per month plus a fee of $10 per A1-sized plot. Consider a customer who prints 50 plots a month. What is their (i) average and (ii) marginal cost per plot?

The below figure depicts Maggie's demand for car rental. Suppose that the car rental agency sets a two-part price including a usage fee of 20 cents per mile. How much can the agency charge for the fixed payment?

The following figure depicts the market demand for gasoline. Suppose that the price of gasoline rises from US$2 to US$3 per gallon. Which areas represent the changes in (i) expenditure, and (ii) buyer surplus?

The average home in Hong Kong is much smaller in size than in Australia. How is the difference related to land being more expensive in Hong Kong?

Fields can be ploughed with human labor, animal power, or fuel-burning machines. Explain how the choice among the methods of ploughing depends on worker wages.

Explain the relations among the demands for electric cars, batteries, and charging stations.

How would a switch from gasoline-powered to electric cars affect the demands for: (a) Gasoline. (b) Spark plugs. (c) Tires. (d) Car washes?

Tesla and NIO produce only electric cars. How would advertising by Tesla affect the demand for NIO cars?

Suppose that a food delivery service cuts its commission. How would consumers respond and how would they benefit?

Luna Supplies offers to lease a plotter on a 12-month contract for a basic rental of $500 per month plus a fee of $10 per A1-sized plot. (a) Explain this pricing strategy as a two-part price. (b) Consider a customer who prints 50 plots a month. What is their average and marginal cost per plot?

The below figure depicts Maggie's demand for car rental. Suppose that the car rental agency sets a two-part price including a usage fee of 20 cents per mile. How much can the agency charge for the fixed payment?

The following figure depicts the market demand for gasoline. Suppose that the price of gasoline rises from US$2 to US$3 per gallon. Which areas represent the changes in (a) expenditure, and (b) buyer surplus?