ECON 1050 Lecture Notes - Lecture 4: Apple Juice, Demand Curve, Economic Equilibrium

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scarletminnow101

28 May 2015

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No frills wants to increase the quantity of bananas that it sells by 20%. The price elasticity of the demand for bananas sold at no frills is 4. Demand schedule for hotel rooms. Quantity demanded (millions of rooms per night) Price elasticity of demand for orange juice= Cross elasticity of demand for apple juice with respect to orange juice= From the new york times, may 2, 2009. In california, gasoline consumption decreased by 4% and the price of gasoline increased by 30% in january. 2008 from a year earlier. In april 2008, toyota yaris sales increased by 46% and full- size pickup sales decreased more than 15%. Compute the price elasticity of demand for gasoline. Calculate the cross elasticity of demand for toyota yaris and full- size pickup with respect to the price of gasoline. Janet"s demand for tea is income _____. For janet, tea is _______ good. Income elasticity of demand for concerts=

Related Questions

Suppose that business travelers and vacationers have the following demand for airline tickets

Price Qty. Demanded (business travelers) Qty. Demanded (vacationers)

price	Tickets Demanded (business travelers)	Tickets Demanded (Vacation travelers)
150	2100	1000
200	2000	800
250	1900	600
300	1800	400

1A. As the price of tickets rises from $200 to $250, what is the price elasticity of demand for Business Travelers. Is demand elastic or inelastic? Show your work

Illustrate the demand curves on the graph.

1B. As the price of tickets rises from $200 to $250, what is the price elasticity of demand for Vacationers. Is demand elastic or inelastic? Show your work!

1C. Why might vacationers have a different elasticity than business travelers?

Suppose that your demand schedule for compact disks is as follows:

price	quantity of demanded if income = 10,000	quantity of demanded if income = 12,000
8	40	50
10	32	40
12	24	30
14	16	20
16	8	12

2A. What is the numerical income elasticity of demand as your income increases from $10,000 to $12,000 if the price of the CDs is $12*. Is this product a normal good or an inferior good based on your calculation? Show your work!

2B. What is the numerical income elasticity of demand as your income increases from $10,000 to $12,000 if the price of the CDs is $16*. Is this product a normal good or an inferior good based on your calculation? Show your work!

salmoncoyote141

interval (or arc) elasticity

cross-price elasticity

price elasticity of demand

elastic demand

income elasticity

inelastic demand

inframarginal units

marginal revenue

point elasticity

price effect

quantity effect

total revenue

unitary elastic demand

1. __________________ A measure of consumersâ sensitivity or responsiveness to changes in the price of a good or service.

2. ___________________ When the percentage change in price (in absolute value) is more than the percentage change in quantity demanded (in absolute value).

3. ___________________ When the percentage change in quantity demanded (in absolute value) is more than the percentage change in price (in absolute value).

4. ___________________ When the percentage change in quantity demanded (in absolute value) is just equal to the percentage change in price (in absolute value).

5. ___________________ Total amount paid to a producer for a good or service P * Q.

6. ___________________ The effect on total revenue of a change in price, holding quantity constant.

7. ___________________ The effect on total revenue of a change in quantity, holding price constant.

8. ___________________ An elasticity calculated over an interval of a demand curve or demand schedule.

9. ___________________ Elasticity at a specific price or point on a demand curve.

10. ___________________ A measure of how responsive quantity demanded is to a change in income, all other things constant.

11. ___________________ A measure showing how responsive the quantity demanded of one good is to changes in the price of another good, other factors constant.

12. ___________________ The additional revenue received by producing and selling one more unit of output.

13. ___________________ Units of output that could have been sold at a higher price had the firm not lowered its price to sell additional (marginal) units.

coffeehornet269

1. Grand TV Manufacturer wants to increase the quantity of TVs it sells by 8%. If the price elasticity of demand is 4, the manufacturer must:

a. decrease price by 1.5%.

b. increase price by 1.5%.

c. increase price by 2.0%.

d. decrease price by 2.0%.

2. Suppose that an Italian ice cream firm is facing a linear demand curve and that the current price for the Italian ice cream is set at a point where the price elasticity is 0.7. If the firm decreases the product price,

Select one:

a. the demand becomes less inelastic, and total revenue increases.

b. the demand becomes more inelastic, and total revenue decreases.

c. the demand becomes more inelastic, and total revenue increases.

d. the demand becomes less inelastic, and total revenue decreases.

3. Suppose that in a month, the price of movie rentals decreases from $3.25 to $3. At the same time, the quantity of movie rentals demanded increases from 100 to 120. The price elasticity of demand for movie rentals (calculated using the midpoint formula) is:

a. elastic.

b. zero.

c. inelastic.

d. unitary elastic.

4. The price elasticity of demand for color printers is 1.6, and you would like to see the quantity demanded of color printers increase by 32%. Then the percentage change in price should be:

Select one:

a. 15%.

b. 25%.

c. 10%.

d. 20%.

5. The price of apple increases from $1 to $1.10. At the same time, the quantity of apples demanded decreases from 100 to 90. The price elasticity of demand for apples (calculated using the initial value formula) is:

a. 0.9.

b. 0.02.

c. 1.1.

d. 1.

cyanspider596

ECON 1050 Lecture Notes - Lecture 4: Apple Juice, Demand Curve, Economic Equilibrium

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