Read the directions carefully and answer all parts of each question. Write neatly; if I can't read it, it will be counted wrong. You may work in groups, but you must submit your own solution. Any submissions that are word-for-word identical will receive a score of 0. No late homework will be accepted under any circumstances. . Suppose that as the price of an item increases by 10% that the quantity demanded of that same item decreases by 2%. a. Calculate the price elasticity of demand. (4 pts.) - 0. 2 b. What does the value in a tell you about the good in question? (2 pts.) inelastic 2. Suppose that as the price of an item increases by 10% that the quantity supplied of that same item increases by 22%. a. Calculate the price elasticity of supply. (4 pts.) + 2. 2 b. What does the value in a tell you about the good in question? (2 pts.) elastic Suppose that as the income level increases by 10% that the quantity demanded of that same item increases by 6%. a. Calculate the income elasticity of demand. (4 pts.) + o. b. What two things does the value in a tell you about the good in question? (4 pts.) inelastic normal Suppose that as the price of an item increases by 10% that the quantity demanded of a different good item increases by 1%. a. Calculate the cross-price elasticity of demand. (4 pts.) FO. \\ b. What two things does the value in a tell you about the goods in question? (4 pts.) Substitutes, inelastic Q FC VC TC MC AFC AVC ATC 5,000 O 5,000 200 5,000 1000 6,000 5 25 5 30 500 5, DOO 4, 000 9000 10 10 8 10OO 5, 000 12000 17, 000 16 5 12 17 2000 5, 000 50, 000 55,000 38 2.5 25 27.5 Complete the table above. (14 pts.) Is this short-run or long run? (0 pts.) How do you know? (2 pts.) Sketch the MP and TP curves for the firm above. Identify on your MP graph where this firm experiences teamwork/specialization and crowding of the fixed input. (6 pts.)