In the Spring and Summer of 1993,Chronic Wasting Disease Wiped

question 115

Multiple Choice

In the spring and summer of 1993,Chronic Wasting Disease wiped out 25% of the elk herd in Wyoming,and the number of state hunting licenses issued was reduced accordingly.In order to compensate for the decrease in license issuances,Wyoming dramatically increased the price.Unfortunately,this strategy proved unsuccessful as the state reported a 50% decrease in total elk license revenues for '93.Which of the following most accurately describes this economic situation?

• A)The demand for Wyoming elk hunting is price inelastic.
• B)The demand for Wyoming elk hunting is price elastic.
• C)The supply of Wyoming Elk hunting is price elastic.
• D)The demand for Wyoming Elk hunting fell.

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Definitions:

Producer Surplus

Producer surplus is the difference between the amount producers are willing to accept for a good or service and the amount they actually receive, measured by the area above the supply curve and below the market price.

Market Demand

The total quantity of a good or service that all consumers in a market are willing and able to purchase at various prices.

Market Supply

The total quantity of a good or service available for purchase at any given price level in a given market.

Price Floor

A government or regulatory-imposed minimum price set above the equilibrium price, preventing the market price from falling below it.