.The federal government decides to require that automobile manufacturers install new anti-pollution equipment that costs $2,000 per car. Under what conditions can carmakers pass almost all of this cost along to car buyers? Under what conditions can carmakers pass very little of this cost along to car buyers?

6.Suppose you are in charge of sales at a pharmaceutical company, and your firm has a new drug that causes bald men to grow hair. Assume that the company wants to earn as much revenue as possible from this drug. If the elasticity of demand for your company's product at the current price is 1.4, would you advise the company to raise the price, lower the price, or to keep the price the same? What if the elasticity were 0.6? What if it were 1? Explain your answer.

7.What would the gasoline price elasticity of supply mean to UPS or FedEx?

8.The average annual income rises from $25,000 to $38,000, and the quantity of bread consumed in a year by the average person falls from 30 loaves to 22 loaves. What is the income elasticity of bread consumption? Is bread a normal or an inferior good?

9.Suppose the cross-price elasticity of apples with respect to the price of oranges is 0.4, and the price of oranges falls by 3%. What will happen to the demand for apples?

10.What is the formula for calculating elasticity?

11.What is the price elasticity of demand? Can you explain

12.What is the price elasticity of supply? Can you explain

13.Describe the general appearance of a demand or a supply curve with zero elasticity.

14.Describe the general appearance of a demand or a supply curve with infinite elasticity.

15.If demand is elastic, will shifts in supply have a larger effect on equilibrium quantity or on price?

16.If demand is inelastic, will shifts in supply have a larger effect on equilibrium price or on quantity?

17.If supply is elastic, will shifts in demand have a larger effect on equilibrium quantity or on price?

18.If supply is inelastic, will shifts in demand have a larger effect on equilibrium price or on quantity?

19.Would you usually expect elasticity of demand or supply to be higher in the short run or in the long run? Why?

20.Under which circumstances does the tax burden fall entirely on consumers?

21.What is the formula for the income elasticity of demand?

22.What is the formula for the cross-price elasticity of demand?

23.What is the formula for the wage elasticity of labor supply?

24.What is the formula for elasticity of savings with respect to interest rates?e