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Contemporary Economics: An Applications Approach By Robert J. Carbaugh 1st Edition

Explore elasticity of demand and supply applications in various sectors like housing, gasoline, airline travel, and vegetable markets. Understand the impact of price ceilings and floors on market dynamics. Learn how elasticity coefficients affect pricing strategies.

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Contemporary Economics: An Applications Approach By Robert J. Carbaugh 1st Edition

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  1. Contemporary Economics:An Applications ApproachBy Robert J. Carbaugh1st Edition Chapter 3: Demand and Supply Applications

  2. Elasticity of Demand Price elasticity of demand Estimated price elasticities of demand elasticity coefficient item short run long run Airline travel 0.1 2.4 Medical care 0.3 0.9 Natural gas 1.4 2.1 Auto tires 0.9 1.2 Stationery 0.5 0.6 Gasoline 0.2 0.7 Housing 0.3 1.9 Automobiles 1.9 2.2 Movies 0.9 3.7 Jewelry & watches 0.4 0.7 Radio & TV repair 0.5 3.8 Foreign travel 0.1 1.8 Glass, china, etc. 1.5 2.5 Carbaugh, Chap. 3

  3. Elasticity of Demand Elasticity and airline ticket tax Price ($) D0 (inelastic) S1 (with tax) S0 (without tax) 520 D1 (elastic) Carbaugh, Chap. 3

  4. Elasticity of Supply Price elasticity of supply Estimated price elasticities of supply Price elasticity Vegetable short run long run Lima beans 0.10 1.70 Cabbage 0.36 1.20 Carrots 0.14 1.00 Cucumbers 0.29 2.20 Onions 0.34 1.00 Green peas 0.31 4.40 Green peppers 0.07 0.26 Tomatoes 0.16 0.90 Cauliflower 0.14 1.10 Celery 0.14 0.95 Spinach 0.20 4.70 Carbaugh, Chap. 3

  5. Price Ceilings and Floors Rent ceilings and housing shortages Rent ($) S0 C Shortage A B Rent ceiling D1 D0 Carbaugh, Chap. 3

  6. Price Ceilings and Floors Usury ceilings and credit shortages S0 Interest rate C Shortage A B Interest ceiling D1 D0 Carbaugh, Chap. 3

  7. Price Ceilings and Floors Market for gasoline with a price ceiling S1 Price S0 C A B Price ceiling Shortage D0 Carbaugh, Chap. 3

  8. Price Ceilings and Floors Effect of price supports for wheat Price S0 Surplus B C Price floor A D0 Carbaugh, Chap. 3

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