no graphs needed

QUESTION 5

For this question, assume economists have determined that the price elasticity of demand for housing in a given range of the demand curve is -1.75. Suppose that the price of housing increases by 10 percent.

Given the value of price elasticity of demand, is demand for housing elastic or inelastic in the given range of the demand curve?

What happens to quantity demanded of housing (what is the percentage change in the quantity demanded of housing) as price of housing increases by 10%?

As price of housing increases by 10%, does total expenditure (spending) on housing increase or decrease?

Please explain your answers.

Answer this question with a narrative response in the text box provided (no graph needed).

Question 6

For this question, assume economists have revised their estimate of the price elasticity of demand for housing to -0.75 for a given range of the demand curve. Suppose that the price of housing increases by 10 percent.

• Given the new estimate ofprice elasticity of demand, is demand for housing elastic or inelastic in the given range of the demand curve?
• What happens to quantity demanded of housing (what is the percentage change in the quantity demanded of housing) as price of housing increases by 10%?
• As price of housing increases by 10%, does total expenditure (spending) on housing increase or decrease? Please explain your answers.

Answer this question with anarrativeresponsein the text box provided (no graph needed).