Homework-2_1 - ECON 002 Homework 2 Read these instructions...

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ECON 002 Homework 2 _______________________________________________________________________ Read these instructions carefully! Carefully answer each of the questions below. You can write or type your answers for the questions EXCEPT THE GRAPH FOR PART 3D) MUST BE COMPLETED BY HAND (NOT USING THE DRAWING TOOLS IN WORD OR ANY OTHER PROGRAM). Please put your name and PSU ID number at the top of the 1 st page. You may use as many sheets of paper as you need. When you are finished, scan your entire document (including the parts you typed and the parts done by hand). Save the file on your computer (.PDF format preferred) and then upload it to the ANGEL drop box for this homework assignment. ________________________________________________________________________ 1. Use the graph below to answer the following questions. (26 points) a. What is the absolute value of the price elasticity of demand between P=100 and P=80? (5 points) i. Based on the value you calculated, is demand elastic, inelastic, or unit elastic? (4 points) ii. What does the value you calculated imply about the relationship between price and quantity demanded? (4 points) b. What is the absolute value of the price elasticity of demand between P=40 and P=20? (5
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