elasticity
ECON 2102-003
Fall 2013 name _________________________ HOMEWORK ONE
1. What is the numerical value for the 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 vertical demand curve? . 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 of demand if a 2% price decrease leads to a 6% increase in quantity demanded? .
2. Consider the following demand schedule for widgets: price ($ per widget) Quantity (# per month) 2 100 4 85 6 70 8 40 10 5
What is the price elasticity of demand for widgets between $8 and $10? . What is the elasticity of demand between $2 and $4? . As price decreases, demand becomes more / less elastic. What is total revenue per month at a price of $4? . A reduction in price from $4 to $2 causes total revenue to rise / fall because demand is elastic / inelastic. If price is currently $2, then a 1% increase in price will cause a percent increase / decrease in quantity demanded.
3. Price elasticity of demand would be larger / smaller for a necessity than for a luxury. Elasticity of demand would be larger / smaller in the short run than in the long run. Elasticity of demand would be larger / smaller for Cheerios than for all cereal. Elasticity of demand would be larger / smaller for table salt than for
Fall 2013 name _________________________ HOMEWORK ONE
1. What is the numerical value for the elasticity of demand if a price change causes no change in quantity demanded? . What is the numerical value for elasticity of demand if a price change causes no change in total revenue? . What is the elasticity of demand for a vertical demand curve? . What is the elasticity of demand for a horizontal demand curve? . What is the elasticity of demand if a price increase leads to an increase in total revenue? elastic / inelastic. What is the numerical value for the elasticity of demand if a 2% price decrease leads to a 6% increase in quantity demanded? .
2. Consider the following demand schedule for widgets: price ($ per widget) Quantity (# per month) 2 100 4 85 6 70 8 40 10 5
What is the price elasticity of demand for widgets between $8 and $10? . What is the elasticity of demand between $2 and $4? . As price decreases, demand becomes more / less elastic. What is total revenue per month at a price of $4? . A reduction in price from $4 to $2 causes total revenue to rise / fall because demand is elastic / inelastic. If price is currently $2, then a 1% increase in price will cause a percent increase / decrease in quantity demanded.
3. Price elasticity of demand would be larger / smaller for a necessity than for a luxury. Elasticity of demand would be larger / smaller in the short run than in the long run. Elasticity of demand would be larger / smaller for Cheerios than for all cereal. Elasticity of demand would be larger / smaller for table salt than for