Chapter 1. Elasticity

1.1

Econ Tutorial
As you progress through the tutorial, the question sequences will become available. You must complete all the question sequences to receive credit for this tutorial.
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Questions

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Question

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2
No, that's not it. % change Q = (20-15)/15 = 5/15= .333. % change P = (2-3)/3 = -1/3 = -.333. Price elasticity of demand = -1 or, in absolute value, 1.
Great job!

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13

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% change Q = (25-20)/20 = 5/20= .25. % change P = (1-2)/2 = -1/2 = -.50. Price elasticity of demand = -1/2= -0.5 or, in absolute value, 0.5.
Correct. Good job!

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14

Question

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2
Incorrect. The price effect = -$15 ($1 less is collected on each of the first 15 units than before) and the quantity effect is +$10 (5 more are sold at the new price of $2).
Correct. Good job!

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4

Question

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2
Incorrect. % change Q = (150-100)/100 = 50/100= .50. % change income = ($40,000-$30,000)/$30,000 = 1/3 = 0.3. Income elasticity of demand = .5/.3 = 1.667.
Correct. Good job!

Questions

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10

Question

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2
Incorrect. % change Q (cigarillos) = (25-10)/10 = 15/10= 1.5. % change Price (cigarettes) = ($4-$3)/$3 = 1/3 = 0.3. Income elasticity of demand = 1.5/.3 = 5.
Correct. Good job!