I Answer briefly:

1. What are the tools that aid sellers in their pricing decisions that can increase their total revenue?

2. Price elasticity may be _______________, _________________, or ______________.

3. When you increase price and Qd is inelastic, TR becomes ______________________.

But when you increase price and Qd is elastic, TR becomes ____________________.

Increasing price while Qd is unitary elastic makes TR _________________________.

4. When you decrease price and Qd is elastic, TR becomes _______________________.

A decrease in price while Qd is inelastic makes TR ____________________________.

When you decrease price and Qd is unitary elastic, TR becomes _________________.

5. Income elasticity of demand can determine if a good is ___________, __________ or

_____________. This information helps sellers to know how consumers perceive what kind of goods they sell.

6. Cross elasticity of demand indicates the relationship between two goods. It is important for a seller to know if his/her product is a ____________ or a __________

especially if the other good is doing well in the market.

7. Price elasticity of supply can be determined if quantity supplied can adjust to ________________.

8. Complete the table:

9. If Coke increased it price, what would happen to Pepsi?

10. When you get stranded in a dessert for a long time, which do you think has more value: water or diamond? Discuss.

II Problem Solving

1. Every month, Aling Laura earns PHP 5,000 as a fishball vendor. During this peiod, she also consumes PHP 100 worth of tuyo. When her income increased by PHP 2,500, she began lessening her monthly consumptions of tuyo to PHP 50. From the given, is tuyo a normal, an inferior, or a common good for Aling Laura?

a. Compute for the % changes in quantity demanded and income.

b. Solve for the income elasticity of demand for tuyo.

2. The table below shows the relationship of quantity demand and price for each product X and Y.

GoodQd1Qd2P1P2

X 4 5 45

Y 2 3 22

a. Solve for the cross elasticity of the table given.

3. Another schedule for two goods.

GoodQd1Qd2P1P2

X2553

Y2331

a. Solve for the cross elasticity of the table given.

4. The old price of Sardines is PHP 10. At PHP 10, a producer can supply 100 cans of them. When the selling price changes to PHP 12, the producer was able to increase its production to 120 units. Solve for the price elasticity of supply.

5. Suppose that the old price of instant noodles is PHP 5 and a seller can produce 100 packs of them. When the price rose by PHP 2, the producer has doubled his production. How elastic is his supply noodles?

6. A 14 inch TV is originally sold at PHP 5,000. At his price, an appliance store is able to sell 100 TVs in the market. The following month, the new price of TV is PHP 7,500. However, the store has only increased its output by 5 units. How elastic was the supply of the store's TV.