Homework 2 Answer Key - ECON 1014-01 HOMEWORK#2 DR...

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ECON 1014-01 HOMEWORK #2 DR. PODGURSKY Due: 09/30/2014. Homework can be turned in after class or by 4:00 p.m. at the Econ Help Desk in 1A West in the Professional Building. No assignments will be accepted after 4:00 p.m. on 09/30/2014. Please print this assignment from Blackboard and staple!!! (Show your work if specified) Name: ______Answer Key________________ Pawprint ID:__________________ Chapter 5 1. Figure: Elasticity of Demand a. Use the general elasticity computation formula (not the midpoint formula!) to compute the elasticity of demand as price falls from 60 to 40. Is demand inelastic, elastic, or unit elastic? Show your work. (2 pts) Demand is Elastic (1 pt.) (1 pt. for calculated elasticity) (-1/2 no work) b. Now use the midpoint formula (p. 70 of the textbook) to compute the elasticity of demand as price falls from 60 to 40. Show your work. (1 pt) (- 1/2 no work)
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Score ______ / 31 c. Now use the general elasticity formula to compute E D as price increases from 40 to 60. Show your work. (1 pt) (-1/2 no work) d. How does your answer in (a) differ from that in (c)? Use inequalities to demonstrate and state which is more elastic. (1 pt) Chapter 6 2. Using the graph shown, answer the following questions. (7 pts) (1 pt. each)
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