ECN211 Module 3

ECN211 Module 3 - 5_1P Microeconomics Professor Alan Wells...

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5_1P Page 1 Microeconomics Professor Alan Wells Module 3 5_1P Price (per pair) $100.00 $80.00 $60.00 $40.00 $20.00 Quantity demanded (pairs per day) 10 14 18 22 26 a) How many pairs will be demanded when the price is $70.00? b) How much money will be spent on shoes at a price of (I) $50 (ii) $90 a) Between 14-18 pairs will be demanded at the $70 price point. b) I) Approximately $1,000 will be spent on shoes ($50 * 20pairs) at the $50 price point. c) ii) Approximately $1,350 will be spent on shoes ($90 * 15pairs at the $90 price point. 1. Illustrate the following demand on the accompanying graph: 8 10 12 14 16 18 20 22 24 26 28 $0.00 $20.00 $40.00 $60.00 $80.00 $100.00 $120.00 Row 8 Quantity (Pairs per day) Price (dollars per pair)
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5_3P Page 2 5_3P According to the News stories on pages 95 and 96, by how much would cigarette prices have to rise to get to 50% reduction in smoking by (a) Teenagers? (b) Adults (short run)? a) Changes in price points on cigarettes impact youth more than adults. For every 10 percent decline in price youth smoking rises by almost 7 percent. So therefore considering a 50% reduction in the price of cigarettes would result in a 35% increase (estimated) in youth smoking. b) For every 10% increase in the price of cigarettes
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ECN211 Module 3 - 5_1P Microeconomics Professor Alan Wells...

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