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Chapter 5 - Test Part 2 - (AP MICROECONOMICS) - Sarah
Course: Introduction to Microeconomics (ECON1001)
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University: University of Cincinnati
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AP® Microeconomics | Graded Assignment | Chapter 5 Short Answer and Essay
Name: Sarah Oberto Monasterios
Date: March 26th, 2021
Graded Assignment
Chapter 5 Short Answer and Essay
Subjective Short Answer
Complete this teacher-scored portion of the Unit Test and submit it to your teacher by the due date for full credit.
Spend about ten minutes on each question. Take time to think about your answer before you begin writing.
(Score for Question 1: _____ of 2 points)
1. Suppose the price of natural gas, a typical fuel for heating homes, rises in January in Alaska. Would you
expect the price elasticity of demand for natural gas to more inelastic immediately after the price increase
or at some point in the future?
Answer:
Based on the information given, I would expect the price elasticity of demand to be more inelastic
immediately after the price increase.
(Score for Question 2: _____ of 2 points)
2. Suppose a freeze in Florida significantly reduces the supply of oranges this year. As a result, would you
expect the total revenue from the sale of orange juice to rise or fall? Explain.
Answer:
In order to answer this question it is important to analyse the context of the hypothetical situation. To
begin with, it is known that oranges are a necessary input to produce orange juice, and this means that
increasing the price of oranges will consequently reduce the supply of orange juice. The total revenue
may increase or decrease when the price of orange juice rises. In this case, if the demand for orange
juice is elastic, the total revenue will fall/decrease; however, if the demand for orange juice is inelastic,
the total revenue will rise/increase.
Essay
Spend about thirty minutes on the essay question. Take time to think about your answer before you begin writing.
You may want to begin with an outline to organize your ideas and to make sure you answer all parts of the essay.
(Score for Question 3: _____ of 10 points)
3. Suppose you manage a baseball stadium. To pay the salary for a star player, you would like to increase
the total revenue from ticket sales. Should you increase or decrease the price of a ticket to increase
revenue? Explain.
Answer:
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