Calculating changes in price level Quantity in Basket 2006 2007 2008 Price Cost of Basket Price Cost of Basket Price Cost of Basket Notebooks 15 $2 $30 $5 $75 $8 $120 Calculators 1 $70 $70 $100 $100 $130 $130 Large coffees 250 $2 $500 $2 $500 $2 $500 Highly caffeinated colas 50 $2 $100 $4 $200 $6 $300 Textbooks 10 $120 $1,200 $150 $1500 $180 $1800 Total cost $1,900 $2,375 $2,850 Price index The total cost of a market basket of goods increased by % from 2006 to 2007, and by % from 2006 to 2008. Use this information to determine the value of the price index in each year (using 2006 as the base year) and enter these values into the preceding table.

Calculating changes in price level Quantity in Basket 2006 2007 2008 Price Cost of Basket Price Cost of Basket Price Cost of Basket Notebooks 15 $2 $30 $5 $75 $8 $120 Calculators 1 $70 $70 $100 $100 $130 $130 Large coffees 250 $2 $500 $2 $500 $2 $500 Highly caffeinated colas 50 $2 $100 $4 $200 $6 $300 Textbooks 10 $120 $1,200 $150 $1500 $180 $1800 Total cost $1,900 $2,375 $2,850 Price index The total cost of a market basket of goods increased by % from 2006 to 2007, and by % from 2006 to 2008. Use this information to determine the value of the price index in each year (using 2006 as the base year) and enter these values into the preceding table.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 7SCQ: What would the gasoline price elasticity of supply mean to UPS or FedEx?

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Price Quantity Demanded Item Last Month This Month Last Month This Month Large Drink $6.00 $5.50 150 161 Large Popcorn $7.50 $8.00 125 101 Small Drink $2.50 $2.00 75 80 Small Popcorn $5.00 $5.25 45 39 Candy $4.00 $3.50 57 68 Hot Dog $5.00 $5.25 35 36 Movie Ticket $8.00 $9.00 428 300 Q1: Calculate the price elasticity of demand for large popcorn (show work) Q2: Is the price elasticity of demand for large popcorn price elastic, inelastic, or unit (unitary)? Q3:
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(a)Diagrammatically‌ ‌show‌ ‌and‌ ‌explain‌ ‌how‌ ‌oil‌ ‌prices‌ ‌dropped‌ ‌as‌ ‌concerns‌ ‌over‌ ‌fuel‌ ‌demand‌ ‌in‌ ‌the‌ ‌near‌ ‌term‌ ‌in‌ ‌COVID-19‌ ‌pandemic‌ ‌hit‌ ‌Europe‌ ‌and‌ ‌the‌ ‌United‌ ‌States.‌ ‌ ‌ ‌ ‌ (b)Diagrammatically‌ ‌show‌ ‌and‌ ‌explain‌ ‌what‌ ‌happened‌ ‌to‌ ‌the‌ ‌oil‌ ‌market‌ ‌if‌ ‌the‌ ‌price‌ ‌remained‌ ‌unchanged‌ ‌despite‌ ‌the‌ ‌concerns‌ ‌over‌ ‌the‌ ‌fuel‌ ‌demand.‌ ‌ ‌ (c)You‌ ‌sell‌ ‌two‌ ‌different‌ ‌goods:‌ ‌printers‌ ‌and‌ ‌toner‌ ‌cartridges.‌ ‌The‌ ‌price‌ ‌elasticity‌ ‌of‌ ‌demand‌ ‌for‌ ‌the‌ ‌printers‌ ‌is‌ ‌-3.4,‌ ‌and‌ ‌you‌ ‌earn‌ ‌a‌ ‌revenue‌ ‌of‌ ‌RM15,000‌ ‌per‌ ‌month‌ ‌from‌ ‌the‌ ‌good.‌ ‌You‌ ‌earn‌ ‌a‌ ‌revenue‌ ‌of‌ ‌RM5,000‌ ‌per‌ ‌month‌ ‌from‌ ‌the‌ ‌toner‌ ‌cartridges.‌ ‌The‌ ‌cross‌ ‌price‌ ‌elasticity‌ ‌of‌ ‌demand‌ ‌for‌ ‌both‌ ‌of‌ ‌the‌ ‌goods‌ ‌is‌ ‌-2.5.‌ ‌If‌ ‌you‌ ‌decide‌ ‌to‌ ‌decrease‌ ‌the‌ ‌price‌ ‌of‌ ‌the‌ ‌printers‌ ‌by‌ ‌5%,‌ ‌calculate‌ ‌your‌ ‌new‌ ‌total‌ ‌revenues‌ ‌for‌…
What would the gasoline price elasticity of supply mean to UPS or FedEx?
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The figure below represents the weekly demand for GPS units. Price (dollars) 220 200- 180- 160 140 120 100- 80 60 40 20 0 Demand for GPS Units 40 80 120 160 200 240 280 320 360 400 440 Quantity (GPS units) < Prev ***Y 3 of 18 +++ www Next Maternit