1. When the price of internet service rises from $ 24 to $ 26 per month, the quantity demanded decreases from 204 million to 196 million subscribers.

a) Calculate the price elasticity of demand using the midpoint method.

b)State whether the demand of internet services is elastic or inelastic.

2. Would the income elasticity of demand for inner-city bus trips be positive or negative? Why?

3. When the price of falls from $ 9 to $ 7, the quantity demanded of Y increases from 150 to 250.

a) Calculate the cross-price elasticity of demand of Y with respect to X.

b)Are X and Y substitutes, compliments, or neither?

4. If the demand for Mr. Luis bobble head dolls is relatively inelastic, will an increase in the price of dolls cause the total revenue from the dolls to increase, decrease, or stay the same. Explain.

5. If a good has an elastic demand, which is greater -the quantity effeet or the price effect?

6. Based on the graphic below

Based on the graphic below a. Is the price elasticity of demand for milk greater or less than 1? b. If you increase the price of milk, what would happen to total revenue? MILK $.80 $2.40 BUT I STILL NEED IT! MILK $2.40 MILK MILK