Assignment 5

Assignment 5 - ES 102-03: Principles of Economics Micro...

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ES 102-03: Principles of Economics – Micro Stetson University Assignment 5 Spring 2009 1. The price of product X is reduced from $100 to $90 and, as a result, the quantity demanded increases from 50 to 60 units. Therefore demand for X in this price range: A. has declined. B. is of unit elasticity. C. is inelastic. D. is elastic. 2. The price elasticity of demand for beef is about 0.60. Other things equal, this means that a 20 percent increase in the price of beef will cause the quantity of beef demanded to: A. increase by approximately 12 percent. B. decrease by approximately 12 percent. C. decrease by approximately 32 percent. D. decrease by approximately 26 percent. 3. Refer to the above diagram. Between prices of $5.70 and $6.30: A. D 1 is more elastic than D 2 . B. D 2 is an inferior good and D 1 is a normal good. C. D 1 and D 2 have identical elasticities. D. D 2 is more elastic than D 1 . 4. Refer to the above diagram and assume a single good. If the price of the good decreases from $6.30 to
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This note was uploaded on 03/23/2009 for the course ES 102 taught by Professor Dr.ekanayake during the Spring '09 term at Stetson.

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Assignment 5 - ES 102-03: Principles of Economics Micro...

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