Q: If the cost to manufacture each jersey is $$50 and the team sells 570 jerseys at 100 $$each, what is the total profit?

$$(100 - 50) \times 570 = 28,500$$

Question 1

If the price of hotdogs rises significantly, what is the most likely effect on the equilibrium price and quantity in the ketchup market, assuming hotdogs and ketchup are economic complements?

Accepted Answer

The demand for ketchup will decrease, lowering both equilibrium price and quantity.

Question 2

Suppose the price of hotdogs increases. What is the expected effect on the tomato market, given that tomatoes are a key input in ketchup production?

Accepted Answer

Demand for tomatoes will decrease, lowering equilibrium price and quantity.

Question 3

If the price of tomatoes falls due to decreased demand for ketchup, what is the likely effect on the tomato juice market?

Accepted Answer

Supply of tomato juice will shift right, decreasing price and increasing quantity.

Question 4

Given the following data for hockey jerseys: At $$300, 245 jerseys are sold per game. At 250$$, 285 jerseys are sold. Calculate the price elasticity of demand for this interval using the midpoint formula.

Accepted Answer

$$\frac{(40/265)}{(50/275)} = -0.83$$

Question 5

If the elasticity of demand for hockey jerseys between $$300 and 250 is$$ $$-0.83$$, what does this imply about the demand in this price range?

Accepted Answer

Demand is inelastic; raising price will increase total revenue.

Question 6

A hockey team sells 245 jerseys at $300 each. What is the total revenue at this price?

Accepted Answer

$$245 	imes 300 = 73,500$$

Question 7

If the cost to manufacture each jersey is $$50 and the team sells 570 jerseys at 100 $$each, what is the total profit?

Accepted Answer

$$(100 - 50) 	imes 570 = 28,500$$

Question 8

After the team’s top player, David Lightning, is traded, the price of his jersey drops from $$300 to 100. $$What is the most likely economic explanation for this price change?

Accepted Answer

The demand for his jerseys decreased as his popularity declined.

Question 9

If orange juice is a substitute for tomato juice, what happens to the orange juice market when the price of hotdogs rises significantly?

Accepted Answer

Demand for orange juice decreases, lowering equilibrium price and quantity.

Question 10

Suppose the hockey team wants to maximize revenue from jersey sales. If the demand is inelastic in the current price range, what should the team do?

Accepted Answer

Raise the price, as total revenue will increase.

Question 11

If 25% of jerseys sold feature David Lightning’s name and number, and total sales at $300 are 245 jerseys, how many David Lightning jerseys are sold?

Accepted Answer

$$0.25 	imes 245 = 61.25$$

Question 12

Which of the following best describes the effect of a leftward shift in demand for a product, holding supply constant?

Accepted Answer

Equilibrium price and quantity both decrease.

Question 13

If the price elasticity of demand for jerseys is $$-0.70$$ between $$350$$ and $$300$$, what does this indicate about consumer responsiveness?

Accepted Answer

Consumers are relatively unresponsive to price changes in this range.

Question 14

If the team lowers the price of jerseys from $$300 to 250 $$and the demand is inelastic, what happens to total revenue?

Accepted Answer

Total revenue decreases.

Question 15

Which of the following is the correct formula for the midpoint (arc) elasticity of demand between two points $$(Q_1$, P_1$)$$ and $$(Q_2$, P_2$)$$?

Accepted Answer

$$\frac{(Q_2$ - Q_1$)/[(Q_1$ + Q_2$)/2]}{(P_2$ - P_1$)/[(P_1$ + P_2$)/2]}$$

Question 16

If the cost to manufacture a jersey is $$50$$ and the team sells jerseys at $$150$$, what is the profit per jersey?

Accepted Answer

$$150 - 50 = 100$$

Question 17

If the demand for ketchup decreases due to a rise in hotdog prices, what is the likely effect on the supply curve for tomato juice?

Accepted Answer

It shifts right as the cost of tomatoes falls.

Question 18

Which scenario best illustrates the concept of complements in demand?

Accepted Answer

A rise in the price of hotdogs leads to a decrease in demand for ketchup.

Microeconomics Study Guidance: Supply, Demand, and Elasticity in Sports Markets

Study Guide - Practice Questions

Study Guide - Flashcards