Question

Hello,

Is it possible to get additional assistance on these
questions? This is a remedial class I am taking and my
classmates/professor havent been the greatest support.

1. Calculate the price elasticity of demand where a 10 percent
change in price leads to a 5 percent change in quantity demanded.
Is Ed elastic or inelastic?

2. Calculate the price elasticity of demand where a 7 percent
change in price leads to a 21 percent change in quantity demanded.
Is Ed elastic or inelastic?

3. Calculate the cross-price elasticity of demand between
bread and butter where a

20 percent decrease in the price of bread results in a 50
percent increase in the

quantity of butter demanded. Explain your answer.

4. Calculate the income elasticity of demand for sweaters
where a 10 percent

increase in income leads to a 25 percent decrease in the
quantity of sweaters

demanded at a given price. What type of a good is a sweater?
Why?

Answer #1

1.Price Elasticity of Demand

= % Change in Quantity Demanded / % Change in Price

= 5 / 10 = 0.5

Since Elasticity of Demand is less than 1, sober can say that demand is inelastic.

2.Ped = 21 /7 = 3

Since Price Elasticity of Demand is greater than 1, so we can say that demand is Elastic.

3. Cross Price Elasticity of Demand

= % Change in Quantity Demanded of butter / % Change in Price of bread

= 50 / -20 = -2.5

If Cross Price Elasticity of Demand is negative then both goods are complementary. So, both bread and butter are complementary goods.

4. Income Elasticity of Demand

= % Change in Quantity Demanded / % Change in Income

= -25 / 10 = -2.5

Since Income Elasticity of Demand is less than 1, So we can say that sweater is an inferior good. As the income of consumer increases his Quantity Demanded for sweater Decreases.

1. What is the numerical value for the price elasticity of
demand if a price change causes no change in quantity
demanded?________ What is the numerical value for elasticity of
demand if a price change causes no change in total revenue?________
What is the elasticity of demand for a horizontal demand
curve?________ What is the elasticity of demand if a price increase
leads to an increase in total revenue? elastic /
inelastic. What is the numerical value for the elasticity...

If the supply curve is vertical, then supply is
perfectly inelastic.
A) True
B) False
If a $5 decrease in the price of a good leads to a ten
unit increase in quantity demanded, then demand must be
elastic.
A) True
B) False
If the absolute value of the price elasticity of demand
for peanuts is 2, then a 10 percent increase in the price of
peanuts will lead to a 5 percent decrease in the quantity of
peanuts demanded....

A 10 percent increase in the price of soda leads to a 20 percent
increase in the quantity of iced tea demanded. It appears that:
a) elasticity of demand for soda 0.5 and is inelastic.
b) elasticity of demand for iced tea is 2 and is elastic.
c) cross-price elasticity of demand for soda is -0.5.
d) cross-price elasticity of demand for iced tea is 2.

1. A.
Suppose excellent weather leads to a larger than normal tomato
crop. If there is a relatively small change in price compared to
the change in quantity resulting from this large crop, what does
this imply about the price elasticity of demand for tomatoes?
it is relatively elastic
it is relatively inelastic
it is perfectly elastic
it is perfectly inelastic
b. If the price elasticity of demand for tomatoes is -1.25 and
quantity changes by 3% due to this...

1-As we move up the demand curve, the price elasticity of demand
* A) increases B) decreases C) becomes unitary D) does not
change
2-If the price of lemonade increases relative to the price of
grape juice, the demand for: * A) grape juice will decrease. B)
grape juice will increase. C) lemonade will decrease. D) lemonade
will increase.
3-An increase in price will result in no change in total revenue
if: * A) the percentage change in price is...

3a)At the farmer's market, Jan sells bags of apples. When she
decreases the price, she attracts more customers. What can we
conclude?
Demand is elastic and Jan's revenue will increase.
We have insufficient information to make any statements about
elasticity.
Demand is inelastic
Demand is elastic
b).
If the cross-elasticity of demand for Good Q with respect to
Good Z is -1.9, then the goods are
complements
normal goods
substitutes
inferior goods
c).Assume that the demand for unskilled workers is...

8.
When the price increases by 30 percent and the quantity demanded
drops by 30 percent, the price elasticity of demand is
unitary elastic.
elastic.
perfectly inelastic.
inelastic.
perfectly inelastic.
9.
If the cross-price elasticity of demand between Good A and Good
B is 2 and the percentage change in price of Good A is 5 percent,
what is the percentage change in quantity demanded of Good B?
-3 percent
1.50 percent
10 percent
3 percent
-1.25 percent

1) Using the midpoint method, the price elasticity of demand is
determined to be about 0.85. If there is a 10% decrease in the
quantity demanded of the product then what effect would this have
on the price of the product?
A decrease in the price of the product from $8.50 to $10
A 11.8% increase in the price of the product
An increase in the price of the product from $8.50 to $10
2)The ________ is negative for complementary...

Assume economists have determined that the price elasticity of
demand for housing in a given range of the demand curve is -1.75.
Suppose that the price of housing increases by 10 percent.
Given the value of price elasticity of demand, is
demand for housing elastic or inelastic in the given range of the
demand curve?
What happens to quantity demanded of housing (what is the
percentage change in the quantity demanded of housing) as
price of housing increases by 10%?...

A price change causes the quantity demanded for a good to
increase by 20 percent and the total revenue of that good decreases
by 15 percent. What can you say about the price elasticity of
demand at this point.
It's elastic
It's inelastic
It's unitary elastic
It's perfectly elastic

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