question 11 and 10 please solve these two questions
AND SUPPLY unit, what is the predicted percentage change in quan must the dealer believe in order for this to be a wealth. tity demanded? Will total expenditure increase or maximizing action? Explain with a demand-and. decrease? (Remember to use the averaging method to supply diagram. calculate the percentage change in price.) Consider the following products: The following table shows the demand schedule for . kitchen blenders fibre optic cable video games. neurosurgery Quantity oil tankers Demanded Total Expenditure sour cream doughnuts Price (per year) rental apartments (per unit) 400 000 $30 a. Which of these would have the greatest supply A 380 000 elasticity in the short run? Why? 35 b. Which would have the least supply elasticity in the 350 000 40 short run? Why? C 320 000 45 9 Excise taxes are sometimes referred to as "sin taxes" D 50 300 000 when applied to products such as alcohol and ciga- E 5.5 260 000 rettes. Using the concepts of elasticity of demand and supply, explain how we could determine whether it is F 60 230 000 the consumer or the producer that is bearing the burden of such a tax. I 65 190 000 solom on adwald and at full a. Compute total expenditure for each row in the PROBLEMS table. 10 A hypothetical demand schedule for comic books in a b. Plot the demand curve and the total expenditure small town is provided below. curve . C. Compute the price elasticities of demand between Percent Total Percent Change in Elasti- points A and B, B and C, C and D, and so on. Quantity Expendi- Change Quantity city of d. Over what range of prices is the demand for video games elastic? Explain. Price Demanded ture in Price Demanded Demand &. Over what range of prices is the demand for video $11 games inelastic? Explain. 7 Suppose the market for frozen orange juice is in equi- 5 librium at a price of $2.00 per can and a quantity of 4200 cans per month. Now suppose that at a price of $3.00 per can, quantity demanded falls to 3000 cans 11 cans per month. per month and quantity supplied increases to 4500 a. Fill in the table and calculate the price elasticity of demand over each price range. Be sure to use average prices and quantities when computing the a. Draw the appropriate diagram for this market. percentage changes. b. Calculate the price elasticity of demand for frozen b. Plot the demand curve and show the elasticities orange juice between the prices of $2.00 and $3.00. Is the demand elastic or inelastic? over the different ranges of the curve. c. Explain why demand is more elastic at the higher C. Calculate the elasticity of supply for frozen orange prices. supply elastic or inelastic? Suppose you are advising an industry association on juice between the prices of $2.00 and $3.00. Is the the predicted effects of a price change on e on quantity al expenditure on their produ demanded and total expendi J. Explain in general what factors would affect the current price is $1.00 per unit, and quantity demanded elasticity of demand for frozen orange juice. is 2500 units per day. Based on extensive empiricin Explain in general what factors would affect the studies, you know that price elasticity of demand elasticity of supply of frozen orange juice. For each of the following events, the product is 0.5. If the price increases to $2.00 per elasticity concept. Then comp city, using average pr lations. In all paribus ch
