HW3_spring08 - (25 Points total Remember to type the...

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HW #3 Economics 304K: Principles of Microeconomics Prof. Meg Ledyard Due Thursday March 6, 2008 (25 Points total) Remember to type the homework except for charts and graphs. In order to get full credit, you must show all of your work. Homework is due in class on the date listed above. If you do not staple your homework, please include your name on all pages, and the number of pages on the first page. Question 1: (9 points) Suppose that May only consumes ribbons and lace. Suppose that you observe the following data: When the price of lace is 25, the quantity May consumes of ribbons is 200 and the quantity May consumes of lace is 400. The quantity supplied of lace at 25 is 200. When the price of lace is 30, May consumes 150 ribbons and 300 lace. The quantity supplied of lace at 25 is 300. a. (3 points)Solve for the price elasticity of demand for lace. What does this tell you about the demand curve for lace? b.
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This note was uploaded on 06/08/2008 for the course ECON 304K taught by Professor Ledyard during the Spring '08 term at University of Texas.

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HW3_spring08 - (25 Points total Remember to type the...

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