The graph below illustrates the demand curve for hammocks. As the price decreases, the demand curve becomes: b Question 37 C d Price $140 $120 $100 $80 $60 $40 $20 more elastic less elastic perfectly elastic A perfectly inelastic B 50 100 Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. C :D E :F Demand 150 200 250 300 350 Quantity of Hammocks Demanded

The graph below illustrates the demand curve for hammocks. As the price decreases, the demand curve becomes: b Question 37 C d Price $140 $120 $100 $80 $60 $40 $20 more elastic less elastic perfectly elastic A perfectly inelastic B 50 100 Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. C :D E :F Demand 150 200 250 300 350 Quantity of Hammocks Demanded

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 15CTQ: Income Effects depend on the income elasticity of demand for each good limit you buy. If one of the...

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The price elasticity of demand is more likely to be inelastic if Othere are a lot of substitutes available. O the price of the product is a large fraction of income. Othere is a long time frame involved. O the product is a necessity.
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Creative Homework/Short Project Assume that you arean entrepreneur who runs a bakery that sells glutenfree breads and cakes. You believe that the currenteconomic conditions merit an increase in the price ofyour baked goods. You are concerned, however, thatincreasing the price might not be profitable becauseyou are unsure of the price elasticity of demand for yourproducts. Develop a plan for the measurement of priceelasticity of demand for your products. What findingswould lead you to increase the price? What findingswould cause you to rethink the decision to increaseprices? Develop a presentation for your class outlining(1) the concept of elasticity of demand, (2) why raisingprices without understanding the elasticity would bea bad move, (3) your recommendations for measurement, and (4) the potential impact on profits for elasticand inelastic demand
6. Elasticity and total revenue The following graph shows the daily demand curve for bikes in Chicago. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. 120 110 Total Revenue 100 90 80 70 60 40 A 30 20 10 Demand 16 24 32 40 48 56 64 72 80 88 96 QUANTITY (Bikes) PRICE (Dollars per bike) 50
Creative Homework/Short Project Assume that you arean entrepreneur who runs a bakery that sells glutenfree breads and cakes. You believe that the currenteconomic conditions merit an increase in the price ofyour baked goods. You are concerned. however, thatincreasing the price might not be profitable becauseyou are unsure of the price elasticity of demand for yourproducts. Develop a plan for the measurement of priceelasticity of demand for your products. What findingswould lead you to increase the price? What findingswould cause you to rethink the decision to increaseprices? Develop a presentation for your class outlining(I) the concept of elasticity of demand, (2) why raisingprices without undetstanding the elasticity would bea bad move. (3) your recommendations for measurement. and (4) the potential impact on profits for elasticand inelastic demand
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Question 13 Each week, Bill spends exactly $20 on coffee, regardless of the price of each cup. Bill's price elasticity of demand for coffee is what? Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a 0 b 1 c greater than 1 d less than 1 but greater than 0
Income Effects depend on the income elasticity of demand for each good limit you buy. If one of the goods you buy has a negative income elasticity, that is, it is an inferior good, what must be true of the income elasticity of the other good you buy?
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Exercise A1 Name three kinds of graphs and briefly state when is most appropriate to use each type of graph.