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PROBLEM SET 3

PROBLEM SET 3 - PROBLEM SET 3 Elasticity Department of...

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Unformatted text preview: PROBLEM SET 3 Elasticity Department of Economics Professor William J. Stull Temple University Economics 92 A. Frozen Frog Legs The monthly demand equation for frozen frog legs in Calaveras County is Q = 100 - 20P. 1. Fill in the blanks (labeled >>) in the following table: Point Price (\$/lb.) Quantity (lbs.)-------------------------------------------------- A 4 >> B >> 40 C >> 60 D >> 2. Plot these points in Figure A and connect with a line. (Be sure to put price on the vertical axis.) 3. What is the slope of the line you have drawn? ___________ Figure A 4. Give a one sentence numerical economic interpretation of this slope. ____________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ 5. Calculate the price elasticity of demand (PED) going from point A to Point B. ____________ 6. Calculate the PED going from B to A. ____________ 7. Give a one sentence numerical economic interpretation of the PED between A and B. ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ 8. 8....
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PROBLEM SET 3 - PROBLEM SET 3 Elasticity Department of...

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