Question: Scenario:Bond’s Gym has developed a reputation for great customer service and low monthly membership fees. Due to this reputation, the gym has reached the maximum number of monthly memberships that can be sold, but it still has a large number of new customers who want to join.

Answer: In this situation, Bond’s Gym is experiencing[Excess demand]

This means that there are[too many]applicants who want to join the gym.

Question: The demand for memberships at Bond’s Gym can be considered

Monthly memberships at Bond’s Gym can be considered a

Answer: [elastic]

[want]

Question: Bond’s Gym is not able to expand quickly. It would take a long time and lots of money to hire more workers, buy equipment, and find a bigger building.

Answer: Based on the graph and the information above, memberships at Bond’s Gym [inelastic]are an supply.

The owner at Bond’s Gym [cannot] increase the supply of memberships easily and quickly.

Question: Scenario: The owner of Bond’s Gym wants your advice. He asks you if you think positive incentives would work better than negative incentives.

He is considering these options:

Raising or lowering prices

Applying discounts or fees

Offering exclusive memberships

Answer: Bond’s Gym should use [negative incentives] to help solve the problem.

If the owner of Bond’s Gym raises his prices, the quantity demanded for membership will most likely [decrease] .

If the owner of Bond’s Gym decides to raise his prices, he could make [more] money per monthly membership.

Question: What will most likely occur after the price of a monthly membership increases? Check all that apply.

~Current members will pay more per month.

~The quantity demanded for memberships will decrease.

~The owner will make more money.

Answer: Scenario:

You have advised the owner of Bond’s Gym that the best thing to do would be to raise the price of a monthly membership.

The owner wants to know what may happen once this price increase goes into effect.