CHAPTER 5ELASTICITY AND ITS APPLICATION1151. For each of the following pairs of goods, which goodwould you expect to have more elastic demandand why?a.required textbooks or mystery novelsb.Beethoven recordings or classical music recordingsin generalc.heating oil during the next six months or heating oilduring the next five yearsd.root beer or water2. Suppose that business travelers and vacationers havethe following demand for airline tickets from New Yorkto Boston:QUANTITYDEMANDEDQUANTITYDEMANDEDPRICE(BUSINESS TRAVELERS)(VACATIONERS)$1502,1001,0002002,0008002501,9006003001,800400a.As the price of tickets rises from $200 to $250, whatis the price elasticity of demand for (i) businesstravelers and (ii) vacationers? (Use the midpointmethod in your calculations.)b.Why might vacationers have a different elasticitythan business travelers?3. Suppose that your demand schedule for compact discsis as follows:QUANTITYDEMANDEDQUANTITYDEMANDEDPRICE(INCOME±$10,000)(INCOME±$12,000)$ 8405010324512243014162016812a.
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