homework 4 - Spencer Lane Econ 101 10966400 Homework 4 1A....

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Spencer Lane Econ 101 10966400 Homework 4 1A. E = % Q [(q^2-q^1)/.5(q^2+q^1)]100 % P [(p^2-p^1)/.5(p^2+p^1)]100 E = [(30-20 )/.5(30+20)]100 [(6-12)/.5(6+12)]100 E= -0.6 B. % TR=% P+% Q If TR decreases for example -.5 but the percent price increases for example +1 then the percent quantity would have to decrease to -1.5. The value of quantity (1.5) is greater then the value of price (1), which makes the demand, curve elastic. C. If % TR is -3% and % P is -10% the % Q would have to be +7. 7 is the % Q in CE equilibrium.
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2%= (% Q)/-1 Multiply by -1 to get rid of the fraction to get that % Q is 2% and elastic. 2=(% Q)/-5 Multiply by -5 to get rid of the fraction to get that % Q is 10% and elastic. E. E = % Q % P -.4= (-20)/% P => -.4 = (-20)/ [(p^2-p^1)/.5(p^2+p^1)]100 => (-.4/-.2) = 1/[(p^2-p^1)/.5(p^2+p^1)]100 => (50/100)/(p^2-p^1)/.5(p^2+p^1) =>p^2=10 p^2-p^1 => 10-6 thus the tax=$4 2. A. S=D 220-Q=2Q+10 Q=70 B. MC=D 2Q+40=220-Q
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This note was uploaded on 02/15/2012 for the course ECONS 101 taught by Professor Michalski during the Fall '08 term at Washington State University .

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homework 4 - Spencer Lane Econ 101 10966400 Homework 4 1A....

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