Questions

INSTRUCTIONS:

This assignment consists of TWO(2) sections.

SECTION A: Application Question (20%) - Answer ALL questions.

The following table illustrates your demand schedule for apples at given prices and incomes.

Price per apple ($)	Quantity demanded (Income = $10,000)	Quantity demanded (Income = $12,000)
1	10	14
2	8	12
3	6	10
4	4	8
5	2	6
6	1	4

Use the mid-point method to calculate your price elasticity of demand as the price of an apple increases from $4 to $5 at your income of $12,000. Explain the result. (5 marks)