1 Price Elasticity of Demand 1 14.01 Principles of Microeconomics‚ Fall 2007 Chia-Hui Chen September 10‚ 2007 Lecture 3 Elasticities of Demand Elasticity. Elasticity measures how one variable responds to a change in an other variable‚ namely the percentage change in one variable resulting a one percentage change in another variable. (The percentage change is independent of units.) Outline 1. Chap 2: 2. Chap 2: 3. Chap 2: 4. Chap 2: Price Elasticity of Demand Income Elasticity of Demand
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Problem Set 3 Name Problem Set 3 is to be completed by 11:59 p.m. (ET) on Monday of Module/Week 6. 1. Data for the market for graham crackers is shown below. Calculate the elasticity of demand between the following prices. Price of crackers Quantity Demanded (per month) $3 80 $2.5 120 $2 160 $1.5 200 $1 240 $1.00 - $1.50: ___$-0.45________________________________ $1.50 - $2.00: ____$_-0.77______________________________ $2.00 - $2.50: _____$_-1.28_____________________________ $2.50 - $3.00: ____$_-2
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Economics Exam 1 Study Guide Vocabulary Opportunity Cost – the value of the opportunities lost Total Cost – the “all or nothing” cost of engaging in any activity Marginal Cost – describes how total costs change as I change the amount (or intensity) of the activity Benefits – The advantageous or desirable outcome of an action Inflation – an increase in the general level of prices Absolute Advantage – the ability to produce the same good using fewer inputs than any other producer. Production
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Problem Set 5 Complete all questions listed below. Clearly label your answers. 1. What impact will an unanticipated increase in the money supply have on the real interest rate‚ real output‚ and employment in the short run? How will expansionary monetary policy affect these factors in the long run? Explain. An unanticipated increase in the money supply will have a significant negative or positive impact on different areas of the economy. Real interest rate will decrease in the short run when money
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Dubai International Academy - 002730 Dubai International Academy Economics DP Internal Assessment Candidate’s name: Nishant Bhushan Candidate number: Teacher: Ms. Reena TIkku Source of the Article: http://news.yahoo.com/dietary-guidelines-panel-advises-policy-changes-soda-tax-215222455--politics.html?soc_src=mail&soc_trk=ma Title of the Article: Dietary guidelines panel suggests tax on sugary foods Date of Article: February 20th 2015 Date Commentary Written: 16/03/15 Word Count (maximum of
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Answer No. 1 Production possibility curve is a particular form of curve‚ which shows the possibility of production in a particular economy (Gwartney‚ Stroup‚ Sobel‚ Macpherson p.28). In an economy‚ the resources are scarce‚ therefore‚ it is important for the economy to make sure that‚ it keeps a balance between the productions and utilizes its resources appropriately. If the production possibility curve of an economy will move outwards then‚ the long run supply curve will have a positive change
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Money Supply CU - currency held by household and firms D - Deposits held by HF M - Money Supply H - Monetary Base RE - Reserves of Charted bank. These are the currency held by chartered banks plus the deposits of chartered banks at the central bank. rD - reserves to deposit ratio c - currency to deposit ratio rD = RE/D < 1 c = CU/D < 1 M = {(c + 1) / (c + rD) * H } m m > 1 We now want to study how the central bank can affect H and therefore M To do this we need to understand
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Chapter 4: Consumer surplus: the difference between market price and what consumers (as individuals or the market) would be willing to pay. It is equal to the area above market price and below the demand curve · the difference between the maximum amount the buyer was willing to pay and the actual price paid Producer surplus: the difference between market price and the price at which firms are willing to supply the product. It is equal to the area below market price and above the supply curve
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This document of ECON 545 Week 7 Discussion Question 2 Forecasting contains: Let’s discuss one of the most important areas of economics‚ namely the use of leading economic indicators to forecast the future direction of the macroeconomy. What websites are helping you gain a better understanding of where the economy is heading in the next 12 months? Business - General Business Let’s discuss one of the most important areas of economics‚ namely the use of leading economic indicators to forecast
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Problem Set 1 Complete all questions listed below. Clearly label your answers. 1. The receipts and year of release of the five movies with the largest nominal box office revenues‚ along with the CPI data of each year are presented below. Assuming that the receipts for each of the movies were derived during their year of release‚ convert the receipts for each to real dollars for the year 2010 (2010 CPI 218.1). Put the movies in order from largest to smallest real box office receipts. Movies
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