Unformatted text preview: 2. Mankiw #4, Chapter 5 A price changes causes quantity demanded to decrease by 30% while total revenue of that good increases by 15%. Is the demand curve elastic or inelastic? Explain. 3. Mankiw #13, Chapter 6. a) Show the effect of a $0.50 per cone subsidy on the demand curve for ice-cream cones, the effective price received by sellers, the effective price paid by buyers, and the quantity of cones sold. b) Does the consumer gain or lose from this policy? Do producers gain or lose? Does the government gain or lose?...
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- Spring '10
- Supply And Demand, Mankiw, Practice Problems Elasticity, VW Beetles Quantity