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Complete the elasticity problems and turn in.

Complete the elasticity problems and turn in. . Show your work. Ed = the product’s elasticity as a number. Based on the number, is the product elastic or inelastic. Example Ed = 4 Elasticity = elastic The questions that go with the graphs.

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Complete the elasticity problems and turn in.

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  1. Complete the elasticity problems and turn in. • . Show your work. • Ed = the product’s elasticity as a number. Based on the number, is the product elastic or inelastic. Example • Ed = 4 • Elasticity = elastic The questions that go with the graphs. • First calculate the total revenue at each price and then based on the change in TR decide whether the product is elastic or inelastic • Use the total revenue test we discussed yesterday

  2. POP QUIZ! COMING SOON

  3. YESTERDAY WE SAID … • IF PRICE GOES DOWN …. • The quantity demanded goes up • And vice versa

  4. SPEAKING IN PRECISE TERMS AS AN ECONOMIST…. • “ A “change in quantity demanded” means there has been a change in …… • The price of the product • This is illustrated graphically by movement up and down the demand curve

  5. A “change in demand” means.. • A nonprice factor (determinant) has caused demand to increase or decrease

  6. T I M E R ASTES NCOME ARKET SIZE XPECTATIONS ELATED GOODS, PRICE OF 5 Determinants of Demand

  7. Chevy Trucks and Ford Trucks are • Substitute Goods • If the price of Chevy Trucks goes up the demand for Ford Trucks will • Go Up • Paint and paint brushes are…. • Complementary goods • If the price of paint goes down, the demand for paint brushes … • Goes up

  8. A CHANGE IN DEMAND IS SHOWN GRAPHICALLY BY … • A SHIFT IN THE DEMAND CURVE • IF THE DEMAND CURVE SHIFTS TO THE RIGHT THEN DEMAND HAS… • INCREASED • IF THE DEMAND CURVE SHIFTS TO THE LEFT THEN DEMAND HAS DECREASED

  9. Complete the following on your own sheet of paper • In the following scenarios, determine if a change in quantity demanded or a change in demand has taken place and indicate if the change is increasing or decreasing demand. Create graphs for each one. • Oprah selects your book as her “Book of the Month.” Congrats. Create a graph for your book. • Dell computer has a “sale of the century” on their pc’s. Apple sales suffer. Create graphs for Dell and Apple. • Prom tickets get very, very expensive. Limo services suffer. Create graphs for prom tickets and limo services. • Cheerios is proven to lower cholesterol. Baby Boomers can’t get enough of them. Create a graph for cheerios • Home Depot has a sale on their plants and flowers. Customers pick up plant fertilizer while they are at it. Create graphs for plants/flowers and one for fertilizer. • There is an e-coli breakout at the local Jack-In-The –Carton restaurants. Create a graph for their meals.

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