{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Discussion section problem set 2 econ 200

Discussion section problem set 2 econ 200 - Problem Set 2...

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

Problem Set 2 Discussion Sections Economics 200 We will review problems 1-3 in discussion sections beginning Wednesday, September 23. We will review problems 4-6 in discussion sections beginning Wednesday, September 30. 1. Consider the following demand schedule: Price Quantity \$12 5 \$10 10 \$5 20 \$3 30 (a) Calculate the elasticity of demand when price rises from (i) \$3 to \$5, (ii) \$5 to \$10, and (iii) \$10 to \$12. (b) When price rises from \$3 to \$5, does expenditure rise, fall, or remain constant? When price rises from \$5 to \$10? When price rises from \$10 to \$12? (c) Why should you have anticipated your answers to (b) once you had answered part (a)? 2. Suppose the price elasticity for cigarettes is 3 for teenagers and .6 for adults. The Maryland State Government hopes to reduce smoking among teenagers by 60% by raising the tax on cigarettes. (a) By what percent would the price of cigarettes have to increase in order to achieve this goal? (b) By how much would adult consumption of cigarettes fall as a result of such a policy change?
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

• 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.

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

• 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.

Dana University of Pennsylvania ‘17, Course Hero Intern

• 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.

Jill Tulane University ‘16, Course Hero Intern