L11X-elasticity 3 jpw

L11X-elasticity 3 jpw - Elasticity 3 Lecture 11 Jennifer P...

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microL11-F09-1 http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ Elasticity 3 Lecture 11 Jennifer P. Wissink ©2009 John M. Abowd and Jennifer P. Wissink, all rights reserved. October 1, 2009

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microL11-F09-2 http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ Announcements F09 Today: Finish up elasticities (all on prelim 1) Start consumer theory (NOT on prelim 1) Review Quiz#5-econ1110-F09 is due Tuesday October 6 Don’t forget to DO WISSINK OLD TRADITIONAL PROBLEM SETS! Use Prof. Abowd’s stuff for additional sample materials, too. Go to our class web page for Prelim 1 Info and SAMPLE exam, etc...
microL11-F09-3 http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ Determinants of Elasticity What is a major determinant of the own price elasticity of demand? Availability of substitutes in consumption. What is a major determinant of the own price elasticity of supply? Availability of alternatives in production.

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microL11-F09-4 http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ Real World Example – Getting it Wrong Gas taxes in Washington DC, 1980 extra 6% tax imposed Aug 16, 1980 to raise much needed revenue for D.C. increased price at pump by 8¢ (a nearly 6% increase) By end of first month, Q D down by 27.5% elasticity = 27.5÷6 = 4.5 pretty darn elastic!
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