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Econ 101 Winter 2010 Lecture 13

# Econ 101 Winter 2010 Lecture 13 - Click to edit Master...

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Unformatted text preview: Click to edit Master subtitle style Lecture 1 Economics 101 Microeconomics University of Michigan Winter 2010 Lecture 13 Lecture 1 22 Lecture 1 Announcements n Today’s reading: n Chapter 6 n Problem set 7 available on CTools n Thursday office hours canceled n Office hours this afternoon: 4:00 – 5:30 Lecture 1 33 Lecture 1 A Unit-free Measure of Price Given a demand function: Qd(P) n Measure the %-change in Qd relative to the %- change in P n Call this the own price elasticity of demand n This is insensitive to the units in which P and Q are measured Lecture 1 44 Lecture 1 Point elasticity vs Arc elasticity If we were given 1. the (inverse of the) slope of the demand curve at a given point: 1. data about the point itself: P, Q then we can calculate the own price elasticity of demand directly, using information only about the point. Lecture 1 55 Lecture 1 Point elasticity vs Arc elasticity Given data about 2 points on the demand curve ( P1, Q1) and (P2, Q2) 1. We can calculate , 1. Which point should dictate the values of P and Q?...
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Econ 101 Winter 2010 Lecture 13 - Click to edit Master...

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