II. Compute for the price elasticity of demand given the following table. Write the resulting elasticity. Show computations at the back

ProductPriceQuantity DemandedQuantity Supplied

A 0.50 1 30

B0.45 2 25

C 0.40 4 20

D 0.35 6 16

E 0.30 912

F 0.25 12 9

G 0.2016 6

H 0.15 20 4

solve the following :

1- Products A and B for price elasticity of supply2- Products G and H for price elasticity of demand

Solution/Answer: _____________________Solution/Answer: _____________________

Solutions:

_____2- Suppose the quantity demanded of cars falls from 5.0 million to 4.0 million as a result of an average price

increase from $15,000 to $20,000 per vehicle. The price elasticity of demand is:

_____ 3. Suppose the price of clair is reduced from $1.45 to $1.25 and, as a result, the quantity of Eclair demanded increases from 2,000 to 2,200. The price elasticity of demand for clair in the given price range is:

Solutions:

_____4. If the price elasticity of demand for a good is 1.65, then a 3 percent decrease in price results in a:

Solutions:

_____ 5. When the price of a good is $5, the quantity demanded is 100 units per month; when the price is $7, the quantity demanded is 80 units per month. What is the price elasticity of demand? What is the type of elasticity?

Solutions:

In the figure below, what is the interval elasticity of demand over the price range $60 to $80? X P 50 A TR 10.500 4-20 Price [in dollars) Total revenue (in dollars) 40 4.500 Total Revenue Demand T 10 1,000 0 100 700 QuantityCalculate opportunity cost Question If a family spends its entire budget in a given time frame, the family can afford either 14 outings or 24 household items. Assuming the family spends its entire budget on just these two things, what is the opportunity cost of one extra outing in the time frame? (Round your answer to two decimal places.)D Question 22 20 pts For each of the following situations, state whether total revenue received by the seller increases, decreases, or does not change. Type your answer in the blank space provided. Your answers should be increases, decreases, or does not change. a) If price elasticity of demand is -0.75 and price decreases, total revenue b) If price elasticity of demand is -1.5 and price decreases, total revenue c) If price elasticity of demand is -0.25 and price increases, total revenue d) If price elasticity of demand is -3.25 and price increases, total revenue e) If price elasticity of demand is -1.00 and price decreases, total revenueQuestion 4 A competitive market for a good is described by a supply curve '9 = 1 _ P3 (y) 0 + 20 and a demand curve Pd (m) = 40 2x. (a) What is the competitive equilibrium price for this market? Illustrate the equilibrium with a diagram and label the axes, curves, and intersections. (b) What is the consumer surplus in equilibrium? (c) What is the producer surplus? n .u _ n .1 an\". Questions 2 and 3 For both questions below, assume that all dollar amounts have already been corrected for inflation. Thus, any change in value of money over time is due only to interest (opportunity cost). Question 2. Find the annual amount equivalent to the following cash flow. Assume 5% discount rate. -$50M +$1M per yr for 10 yrs + $10M 11 20 50 yrs