1. What does the termPrice Elasticity of Demand mean? When the price of a commodity rises from $10 to $14, the quantity demanded falls from 20 units to 10. What would the price elasticity of demand be by using the average price method?
2. How can a firm make use of thePrice Elasticity of Demandto make decisions about changing its price?
3. How do firms raise capital? What criteria do they use in choosing between different alternative methods?
4. In the labor market, what factors would contribute to an increase in the demand for labor? What factors would contribute to an increase in the supply of labor?
5. What's a prediction of how each of the following economic changes will affect the equilibrium price and quantity in the financial market for home loans? In each case, what would be a knowledgable explanation of what will happen supply and or demand curves?

Case 1- The number of people at the most common ages for home-buying increases.

Case 2- People gain confidence that the economy is growing and that their jobs are secure.

Case 3- Banks that have made home loans find that a larger number of people than they expected are not repaying those loans.

Case 4- Because of a threat of a war, people become uncertain about their economic future.