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hwork2-2006 - Homework 2 Due Name 1 10 pts total 5 points...

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Homework 2. Name _______________________________________ Due 2/14/06 1) 10 pts total. 5 points each. a) Find the elasticity of demand between these two points: Point 1: Price = $4, Quantity = 103. Point 2: Price = $6, Quantity = 97. _________________________ b) Find the elasticity of supply between these two points: Point 1: Price = $14, Quantity = 525. Point 2: Price = $16, Quantity = 575. _________________________ 2) 14 pts total . Assume that the elasticity of demand for chicken is 2.00. (Elastic demand example.) a) If supply increases to the point where the equilibrium quantity goes up by 10%, by what percentage will chicken price change? Be sure to say if it rises or falls.(4pt) ___________________________________ b) Graph the supply shift and explain what happens to total revenue (increase, decrease or no change). (10 pts.) 1
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