Question

# no graphs needed

QUESTION 5

For this question, assume economists have

determined that the price elasticity of demand for housing in a given range of the demand curve is -1.75. Suppose that the price of housing increases by 10 percent.

**Given the value of price elasticity of demand, is demand for housing elastic or inelastic in the given range of the demand curve?**

**What happens to quantity demanded of housing (what is the percentage change in the quantity demanded of housing) as price of housing increases by 10%?**

**As price of housing increases by 10%, does total expenditure (spending) on housing increase or decrease?**

** **Please explain your answers.

Answer this question with a narrative response in the text box provided (no graph needed).

Question 6

For this question, assume economists have revised their estimate of the price elasticity of demand for housing to -0.75 for a given range of the demand curve. Suppose that the price of housing increases by 10 percent.

**Given the new estimate of***price elasticity of demand*, is demand for housing elastic or inelastic in the given range of the demand curve?**What happens to quantity demanded of housing (what is the percentage change in the quantity demanded of housing) as price of housing increases by 10%?****As price of housing increases by 10%, does total expenditure (spending) on housing increase or decrease?**Please explain your answers.

Answer this question with a **narrative response** in the text box provided **(no graph needed).**

#### Top Answer

QUESTION 5 The price elasticity of demand of housing is elastic. This means that the price has impact on the quantity... View the full answer