Section Exercise 7 s - 2011 ,Berkeley Doraiswamy Spring Economics1 HeadGSI:Swetha SectionExercise7 For Pleasenote:,but

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Department of Economics               Spring  2011 University of California, Berkeley         Economics 1    Head GSI: Swetha  Doraiswamy Section Exercise 7 Please note: this is not  the solution key for Professor Olney’s midterm questions, but  rather contains tips for approaching exam questions.  FROM SPRING 2007, MIDTERM 1 1) Jimmy’s going to Disneyland! a. Jimmy is going to Disneyland tomorrow. His mom didn’t even look at the price of  Disneyland tickets before offering to take him there. What does this tell you about her  price elasticity of demand for Disneyland tickets? Explain. 1. What do I do first?  Read the ENTIRE question carefully and underline key  words. “Jimmy is going to Disneyland tomorrow. His mom didn’t even look at the price   of Disneyland tickets  before offering to take him there. What does this tell you  about her price elasticity of demand  for Disneyland tickets? Explain .” 2. What economic concept does this question ask me about?  Price elasticity of  demand: be sure to define  this concept in your answer 3. What does this question ask me to do?  Classify  Jimmy’s mom’s price elasticity of   demand  for Disneyland tickets, and explain  how you came to your conclusion. a. What does this question tell me about Jimmy’s mom’s decision-making  process?  We know that Jimmy is going to Disneyland tomorrow, and his mom  offered to take him there without looking at the price of Disneyland tickets. b. What does that mean about her price elasticity of demand for Disneyland  tickets?  Is the price of tickets important to her, i.e. will it affect the number of  tickets that she buys? Will the price have a large effect, small effect, or no effect  on the quantity of tickets that she buys?            Page   1  of  5
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Department of Economics               Spring  2011 University of California, Berkeley         Economics 1    Head GSI: Swetha  Doraiswamy b. Tomorrow at Disneyland, Jimmy will ask to buy a trinket at the gift shop. His mom will  say “Maybe. It depends on the price.” What does this tell you about her price-elasticity of 
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This note was uploaded on 04/26/2011 for the course ECON 1 taught by Professor Martholney during the Fall '08 term at University of California, Berkeley.

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Section Exercise 7 s - 2011 ,Berkeley Doraiswamy Spring Economics1 HeadGSI:Swetha SectionExercise7 For Pleasenote:,but

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