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Exam 2: Demand

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Question 1

Essay

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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?

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(a) The fixed payment is $500 ...

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Question 2

Multiple Choice

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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.

A) Prepaid, Post-paid.
B) Post-paid, Prepaid.
C) Prepaid, Prepaid.
D) Post-paid, Post-paid.

E) None of the above
F) A) and D)

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A

Question 3

Multiple Choice

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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?

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

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

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?

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

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?

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.

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

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

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?

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?

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?

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) .

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.

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?