Exam 5: Elasticity and Its Applications: Part A

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Suppose that good X is a luxury and that good Y is a necessity.Which good would you expect to have more price inelastic demand?

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Question 41

What is the price elasticity of demand at any point on a perfectly inelastic demand curve?

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Question 42

Scenario 5-2 Suppose the demand function for good X is given by: where is the quantity demanded of good X, is the price of good X,and is the price of good Y,which is related to good X. -Refer to Scenario 5-2.Using the midpoint method,if the price of good X is $10 and the price of good Y increases from $8 to $10,the cross price elasticity of demand is about

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Question 43

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.

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Question 44

Scenario 5-6 Consider the markets for mobile and landline telephone service.Suppose that when the average income of residents of Plainville is $55,000 per year,the quantity demanded of landline telephone service is 12,500 and the quantity demanded of mobile service is 28,000.Suppose that when the price of mobile service rises from $100 to $120 per month,the quantity demanded of landline service decreases to 11,000.Suppose also that when the average income increases to $60,000,the quantity demanded of mobile service increases to 33,000. -Refer to Scenario 5-6.Using the midpoint method,what is the income elasticity of demand for mobile service?

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Question 45

If a supply curve is perfectly vertical,what is the value of the price elasticity of supply?

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Question 46

For which of the following goods would demand be most price elastic: a car,a sedan,a Honda sedan,a Honda Accord,a black Honda Accord?

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Question 47

If a supply curve is perfectly horizontal,what is the value of the price elasticity of supply?

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Question 48

Suppose demand is given by the equation: Using the midpoint method,what is the price elasticity of demand between $1 and $2?

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Question 49

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Exam 5: Elasticity and Its Applications: Part A

Suppose that good X is a luxury and that good Y is a necessity.Which good would you expect to have more price inelastic demand?

What is the price elasticity of demand at any point on a perfectly inelastic demand curve?

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.

If a supply curve is perfectly vertical,what is the value of the price elasticity of supply?

For which of the following goods would demand be most price elastic: a car,a sedan,a Honda sedan,a Honda Accord,a black Honda Accord?

If a supply curve is perfectly horizontal,what is the value of the price elasticity of supply?

Suppose demand is given by the equation: Using the midpoint method,what is the price elasticity of demand between $1 and $2?

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion

Application International Trade: Part A

Application International Trade: Part B

Measuring a Nations Income

Measuring a Nations Income: The Economy's Income and Expenditure

Measuring a Nations Income: The Measurement of GDP

Measuring a Nations Income: The Components of GDP

Measuring a Nations Income: Real Versus Nominal GDP

Measuring a Nations Income: Is GDP a Good Measure of Economic Well-Being

Measuring a Nations Income: Part A

Measuring a Nations Income: Part B

Measuring the Cost of Living

Measuring the Cost of Living: The Consumer Price Index

Measuring the Cost of Living: Correcting Economic Variables for the Effects of Inflation

Measuring the Cost of Living: Part A