busn5620_week4_personal_assignment_kelli_carson

busn5620_week4_personal_assignment_kelli_carson - Kelli...

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Kelli Carson BUSN 5260 Current Economic Analysis Week 4: Personal Assignment There are no Internet questions with this assignment. You will have to include graphs with this assignment. Remember graphs must be integrated into your Word or Excel file, course page submission, or sent as a fax. If you have questions, remember to post them to the General Questions area of the Discussion forum. Problems 1
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Kelli Carson Problem 1 The following is a demand schedule for shoes: Price: $100 $80 $60 $40 $20 Quantity: 10 14 18 22 26 -A- Illustrate the demand curve. 0 20 40 60 80 100 120 10 14 18 22 26 Quan tity Price -B- How much will consumers spend on shoes at a price of $80? 14 -C- As price drops from $100 to $80, is the demand elastic or inelastic? Show your work or reasoning. Old New %Change Quantity 10 14 -40% = (10 – 14)/10 Price 100 80 20% = (100-80)/100 Elasticity -2.0 =-40%/20% = Elastic 2
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Kelli Carson Problem 2 Advertisers convince people that to be stylish they need twice as many shoes. -A- Redraw the demand curve. 0 20 40 60 80 100 120 20 28 36 44 52 Qu ant ity Price -B- How much will consumers now spend on shoes at a price of $80?
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