26. Consider a price change from $20 to $30 causes the quantity demanded change from 120 units to 80 units. Use the following diagram to set up the table and show with the price elasticity of demand formula in chapter summary to answer:

A. What is the price elasticity of demand?

P	Q

B. What are the two interpretations of the elasticity number?

27. If inputs of two goods are good substitutes, what would be the

A. marginal rate of transformations of the two products?

B. shape of the production possibility curve of the two products

28. You have $12 to spend on two products: A and B. Product A costs $2 per unit and product

B costs $1 per unit. Use the table below to determine:

Table of Goods A and B

GOOD A (PRICE=$2)					GOOD B (PRICE = $1)
Quantity of A	Total Utility of A	Marginal Utility of A (MUA)	Marginal Utility Per dollar (MUA/PA)		Quantity of B	Total Utility of B	Marginal Utility of B (MUB)	Marginal Utility Per dollar (MUB/PB)
1	10				1	20
2	18				2	26
3	25				3	30
4	31				4	33
5	36				5	35

A. How much each product will be purchased to maximize your utility?

B. How many units of total utility will the consumer receive from two products ?