84Which of the following is an illustration of the market fo

84.Which of the following is an illustration of the market for original paintings by Gogh? C. Qwanlity Qwaneug b. Price d. a. A b, B ?.? d. D Ouestion #5h(PLEASE ANSWER EITHER OUESTION Sa or 5b1 Figure 5-17 Price Price Supply t Price rSapply Supply B Supply D 85. Refer to Figure 5-17. Which of the following statements is not correet? a. Supply curve A is perfectly inelastic b. Supply curve B is perfectly elastic. c. Supply curve C is unit elastic. d. Supply curve D is more elastic than supply curve C 86. Refer to Figure 5-17. Which of the following statements is correct? Supply curve A is perfectly elastic. Supply curve B is perfectly inelastic. Supply curve C is more inelastic than supply curve D. Supply curve D is unit elastic. a. b. c. d.

Solution

4. The correct answer is: a)

Reason: Since the painting is an antique, the supply curve is perfectly inelastic. Also, since the painting is a luxury good, the demand curve should be perfectly elastic. This is satisfied in figure a)

5. The correct answer is: c)

Reason: the slope of supply curve C appears to be more than 45° and thus, it is less than perfectly inelastic.

6. The correct answer is: c)

Reason: since, the slope of supply curve C is more than 45° and that of supply curve D is less than 45°, supply circu C is more inelastic than supply curve D.

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