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Assignment2 - ECON 6000 ASSIGNMENT#2 Instructor Bram...

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September 19, 2011 ECON 6000 ASSIGNMENT #2 Instructor: Bram Gallagher DUE: September 30, 2011 by 11:59 PM by the D2L dropbox (preferable) or E-mail ( [email protected] ). Please use .doc, .pdf, or .rtf formats only. This assignment is open- book, so your score will be based on how clearly your answers are explained. This assignment refers to the reading guides and additional materials. All questions will be weighted equally. 1) Examine the additional study materials number #2. In the USDA report identify two changes that have recently affected US food demand. For the section titled Impacts of High Food Prices Are Extensive , identify the importance of the substitution and income effects. 2) Apple, noticing the recent popularity of a competitor, RoboGizmo, to its recent product, the iDoodad, has decided to decrease the price somewhat to stimulate demand. Initially Apple sold 300,000 units of the iDoodad a month at $400 dollars. After lowering the price to $350, Apple saw its quantity sold increase to 325,000 units. What is the arc price elasticity of the iDoodad in this case?
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