question 2(a,b)

1. For each of the following pairs of goods, which good a. As the price of tickets rises from $200 to $250, would you expect to have more elastic demand and what is the price elasticity of demand for why? (i) business travelers and (ii) vacationers? a. required textbooks or mystery novels (Use the midpoint method in your calculations.) b. Adele recordings or pop music recordings in b. Why might vacationers and business travelers general have different elasticities? c. subway rides during the next six months or 3. Suppose the price elasticity of demand for heating oil subway rides during the next five years is 0.2 in the short run and 0.7 in the long run. d. root beer or water a. If the price of heating oil rises from $1.80 to 2. Suppose that business travelers and vacationers have $2.20 per gallon, what happens to the quantity the following demand for airline tickets from Chicago of heating oil demanded in the short run? In the to Miami: long run? (Use the midpoint method in your Quantity Demanded Quantity Demanded calculations.) Price (business travelers) (vacationers) b. Why might this elasticity depend on the time horizon? $150 2,100 tickets 1,000 tickets 4. A price change causes the quantity demanded of 200 2,000 800 a good to decrease by 30 percent, while the total 250 1,900 600 revenue of that good increases by 15 percent. Is the 1,800 400 demand curve elastic or inelastic? Explain. 300