{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

more_review_questions - labeled diagram show what happens...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Practice Problems 2 Midterm 1 Economics 304K: Principles of Microeconomics Prof. Meg Ledyard Question 1: Suppose that you know the following data: If the price of staples is $1 then the quantity of staples consumed is 250 and the quantity of paper clips consumed is 700. If the price of staples is $0.50 then the quantity of staples consumed is 400 and the quantity of paper clips consumed is 460. a. What is the price elasticity of demand for staples? b. Calculate the cross price elasticity of demand of staples for paper clips. Question 4: Consider the perfectly competitive market for pecan pie. a. Suppose the income elasticity of demand for pecan pie is 10. In a well
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: labeled diagram, show what happens to the equilibrium price and quantity of pecan pie if incomes increase. (not numbers, just directions.) b. Suppose instead that the income elasticity of demand for pecan pie is -2. In a well labeled diagram, show what happens to the equilibrium price and quantity of pecan pie if incomes increase. (not numbers, just directions.) c. Now suppose that the cross price elasticity of demand of pecan pie for milk is -0.5. In a well labeled diagram, show what happens to the equilibrium price and quantity of pecan pie if the price of milk increases. (not numbers, just directions.)...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern