1 Look at Question 1 on problem set #4. The elasticity of demand for the newspaper in this price range is equal to __________. (sign and numeric answer) 1.5 points QUESTION 2 Look at question 1 on your problem set. Now which of the following best classifies the elasticity of demand for the newspaper? It is perfectly elastic. It is elastic. It is unitary. It is inelastic. It is perfectly inelastic. 1.5 points QUESTION 3 Staying with Question 1, if the newspaper INCREASED its price by 1%, it would see a _______% (numeric) decrease in its quantity demanded. 1.5 points QUESTION 4 Last question petaining to Question on on the pronblem set for elasticity. If the newspaper were to lower its price, the total revenue it would obtain from selling the newspapers _______. increase decrease remain unchanged cannot be determined from the given information. 1.5 points QUESTION 5 Move on to Question 2 on the problem set. The elasticity of demand between points A and B on demand curve D1 is equal to _________(sign and numeric answer). 1.5 points QUESTION 6 You are still on Question 2 on the problem set. The elasticity of demand between points X and Y on demand curve D2 is equal to _________(sign and numeric answer). 1.5 points QUESTION 7 The slope of demand curve D1 equals _______(numeric, decimal). 1.5 points QUESTION 8 The slope of demand curve D2 equals _______. (numeric decimal) 1.5 points QUESTION 9 The slope of the demand curve __________ equal the elasticity of demand of the demand curve. does does not 1.5 points QUESTION 10 Now move to question 3 on the problem set pertaining to Chipotle. The elasticity of demand for a Chipotle burrito was found to be -2.25. Which of the following best describes the degree of elasticity it exhibits? It is perfectly elastic. It is elastic. It is unitary. It is inelastic. It is perfectly inelastic. 1.5 points QUESTION 11 Staying with the information from question #3, a 1% increase in the price of a Chipotle burrito would result in a decrease of ________% (numeric) in the quantity demanded of the burritos. 1.5 points QUESTION 12 Suppose Chipotle decied to LOWER its burrito price by 2%. The resulting percentage change in the quantity demanded of the burritos = ___________ (numeric). 1.5 points QUESTION 13 Finally, if Chipotle lowered its price of the burrito by 2% its total revenue from burritos would increase. would decrease. would remain unchanged. cannot be calculated without more information. 1.5 points QUESTION 14 You now should be looking at question #4 on your problem set. It deals with the income changes. When you used the midpoint formula to calculate Taz's income elasticity for macaroni and cheese it came out to ________.(numeric and sign) 1.5 points QUESTION 15 The numeric value of the income elasticity of demand for macaroni and cheese indicates that for Taz, macaroni and cheese is__________. a normal good a luxury and normal good a necessity an inferior good an inferior good, but a luxury 1.5 points QUESTION 16 When you used the midpoint formula to calculate Taz's income elasticity for Coca Cola (Coke) it came out to ________.(numeric and sign) 1.5 points QUESTION 17 The numeric value of the income elasticity of demand for Coca Cola (Coke) indicates that for Taz, Coke is__________. normal good. a luxury good as well as being a normal good. a necessity. an inferior good. an inferior good, but a luxury. 1.5 points QUESTION 18 You need to have question #5 in front of you for the last four questions. After using the midpoint formula, the cross price elasticity of eggs and sausage is _______.(numeric and sign) 1.5 points QUESTION 19 Given the result of the cross price elasticity between sausage and eggs, one can conclude that for Syesha eggs and sausage are_______. substitutes normal inferior complements 1.5 points QUESTION 20 After using the midpoint formula, the cross price elasticity of eggs and bacon is _______.(numeric and sign) 1.5 points QUESTION 21 Given the result of the cross price elasticity between bacon and eggs, one can conclude that for Syesha eggs and bacon are_______. substitutes necessities normal goods complements Refere to this to answer the question Question 1 A newspaper recently lowered its price from 50 cents to 30 cents. As it did, the number of newspapers it sold increased from 240,000 to 280,000. i) Over this price range what was the elasticity of demand for this newspaper? ii) What was the degree of elasticity for the newspaper? iii) A 1% change in the price of the newspaper led to a change in quantity demanded of ______? iv) What happened the newspaper's total revenue as it dropped its price? Question 2 Use the points on the graph below to answer the following questions. P 20 X 15 A 10 B Y D1 D2 0 10 20 30 40 Qty i) What is Ep along D1 (from A to B)? ii) What is the Ep along D2 (from X to Y)? iii) What are the slopes of Demand curves D1 and D2? iv) What can you say about the slopes and the elasticities of these demand curves? Question 3 Economists estimate the short run elasticity of demand for a Chipotle burrito is -2.25. i) What degree of elasticity does Chipotle burritos exhibit? ii) A 1% change in the price of Chipotle burritos would do what to the quantity demanded of Chipotle burritos? iii) What would happen if Chipotle lowered its burrito price by 2% to its sales (numeric answer)? iv) What happens to Chipotle's total revenue if it were to lower its price by 2%? Question 4 Due to the recent downturn in economic activity, Taz, has seen his hours at work reduced. He used to work 30 hours a week at $13 and hour, but now he works 22 hours. Due to this change he noticed he purchased more boxed Macaroni and Cheese, up from 1 box a week to 4. He also reduced his purchase of Coke from 2 12-packs to 1 12-pack per week. i) What is the income elasticity of macaroni and cheese for Taz? ii) What type of good is Macaroni and cheese for Taz? iii) What is the income elasticity of Coke for Taz? iv) What type of good is Coke for Taz? Question 5 Syesha loves to eat Sunday breakfast at her local Scrambles restaurant. She usually orders a la carte. Her usual breakfast consists of 2 scrambled eggs, 1 piece of bacon and 2 links of sausage. The price of an egg, a sausage link and a piece of bacon are all $1. Thus her breakfast has a price of $5. Scramble restaurant changes the price of eggs to $1.50. She now orders the following for her breakfast: 1 scrambled egg, 2 pieces of bacon and 1 sausage link. i) Calculate the cross price elasticity of eggs and sausage. ii) What type of relationship is there between eggs and sausage? iii) Calculate the cross price elasticity of eggs and bacon? iv) What type of relationship is there between eggs and bacon