Microeconomics homework question 11.Suppose that your demand schedule for DVDS is a follows:Quantity demanded(income = $10,000)Quantity demanded(income = $12,000)Price$8405010324512243014162016812a) Use the midpoint method to calculate the price elasticity of demand as the price of DVDSincreases from $8 to $10, given that your income is fixed at $10,000. Show work.b) Use the midpoint method to calculate the income elasticity of demand as your income increases from$10,000 to $12,000, and the price is fixed at $12. {hint: (Q2-Q1)/[(Q;+Q1)]/2 ;where I is Income}(Iz-I1)/[(I+I1)]/2

Answered: Image /qna-images/answer/922208a9-55a0-4ab5-8409-0aba6150e85a.jpg

Answered: Quantity demanded (income = $10,000)…

Quantity demanded (income = $10,000) Quantity demanded (income = $12,000) Price $8 40 50 10 32 45 12 24 30 14 16 20 16 12

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 6PA: Suppose that your demand schedule for DVDs is as follows: Price Quantity Demanded (income = 10,000)...

See similar textbooks

Related questions

Q: 1. Economic profit is defined as the difference between revenue and ____. explicit cost total…

A: “Hey, since there are multiple questions posted, we will answer the first question. If you want any…

Q: Excise duty is also known as

A: Hi! thanks for the question but as per the guidelines we can not answer the opinion-based questions.…

Q: If the government wishes to discourage smoking by tax increases, the buyer pays a larger share of…

A: Demand: - Demand is the relationship between the quantity demanded and the price of a good. There is…

Q: Prove that there is a difference between demand shifting and chaining in quantity demanded use…

A: A movement along the demand curve is called 'change in demanded quantity' and this change in…

Q: The price of one unit of an item or amount is called unit price. Group of answer choices True False

A: unit price is a valuation method for consumers who buy in bulk.

Q: The price of a good increased from AED 5000 to AED 7000 and accordingly the quantity sales of that…

Q: indicates how much of a product consumers are both willing and able to but at each possible price…

A: Consumers are all the individuals who purchase goods and services in the market to satisfy their…

Q: In a territory, there are two available markets for coffee beans Market 1: Foreign: This is the…

A: Answer -

Q: What variable is indeterminate? a. increase in business taxes and an increase in the price of a…

A: Hi, In case of a multipart question, i\'m required to answer the first three subparts. Lucky for…

Q: A firm produces a steel bar. When the price of the steel bar is $ 30,000, the quantity demanded is 8…

A: Elasticity of demand: It is the measurement of percentage change in the quantity demanded of a…

Q: • price drops • consumers make more money • consumers convince their friends 1. to consume •…

A: Change in the quantity demanded differs from the change in demand. Change in the quantity demanded…

Q: Question 20.20 Movie theaters charge lower prices to see a movie in the afternoon than in the…

A: In a market, a firm generally make their pricing policy according to the elasticity of demand and…

Q: Factors used to determine the supply of commodity

A: Supply (SS) refers to the amount of a commodity (Q) that the producer is willing to SS for a given…

Q: If demand for this product increased from D1 to D2 as a result of a decrease in price of a related…

A: Complementary goods are those goods which are consumed simultaneously and can't be consumed alone…

Q: A country is about to let refugees in, but current residents are strongly against it. They are…

A: Wage elasticity of labor demand measures the percentage change in quantity demanded of labor due to…

Q: An increase in the demand for MP3 music indicates that more is A) demanded because sellers are…

A: Demand curve shows a negative relationship between price and quantity demanded. It slopes downward.

Q: Brewed coffee is one of the most popular drinks in the world and a big market in Singapore. In…

A: Given that, brewed coffee is a popular drink in the Singapore market and the world market. Its free…

Q: If the university movie theater has reasoned that increased ticket prices will enable it to finance…

A: Elasticity of demand is the responsiveness of the change in quantity demanded of a commodity to…

Q: What can you do to alleviate food insecurity? Cite 5 possible realistic solutions about the matter

A: Food insecurity is the lack of food for maintaining a healthy lifestyle. Majorly people with…

Q: Intermediate goods have Direct demand True /False

A: If a good is used either for resale or if it is used in the production of some other good then it…

Q: topic : Types of input demand Question . You are interested in the own-price elasticity of…

A: Answer: The demand for input is unconditional, it means the input (water) demand does not depend on…

Q: An increase in the demand for gasoline today caused by concerns that gasoline prices will be higher…

A: The increase in demand caused by concerns of future prices means that there are expectations of…

Q: What is the income elasticity of demand? 0.567 0.332 -1.957 1.706 What is the cross price…

A: Answer in step 2.

Q: When the price of goods X = IDR 10, the quantity demanded is 5. When the price of goods X = IDR 15,…

Q: A group of people that were insured last year paid $20 out of pocket for a primary care visit but…

A: Price elasticity of demand refers to the responsiveness of the quantity demand due to change in the…

Q: A study of the effects of the minimum wage on employment of low-skilled workers estimated the price…

A: We have w2 = 7.75 and w1 = 7.25

Q: 26 Taxes that are imposed directly on income or property are called... 1. Direct 2. Indirect 3.…

A: 26. Taxes that are imposed directly on income and property are called 1. Direct Tax This is by…

Q: The supply of product X is elastic if the price of X rises by Multiple Choice 1 percent and…

A: Elasticity of supply measures the responsiveness of quantity supplied to changes in price.

Q: 1. A liter of alcohol is sold at 450, on a single month a total of 500 liters is sold in the market.…

A: Price elasticity of demand refers to a percentage change in quantity demanded due to a percentage…

Q: Demand is negatively sloped. Supply is perfectly elastic. Putting an excise tax on sellers will…

A: Basics:- Inelastic side whether the buyers side (demand) or suppliers side ( supply) has to bear the…

Q: 5. The cross elasticity of demand for a substitute is ____________. Select one: a.equal to zero…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: The "income effect" in the market for aspirin means that

A: In economics, the demand for a good is affected by not only the price of the good but other factors…

Q: Given the following demand and supply functions, compare the quantity demanded with the quantity…

A: Given: Supply: 3p-7q=2 Demand: p+3q=50 Price=$10 To find: Shortage/surplus

Q: If 100 units of product K are sold at a unit price of $10 and 75 units of product Kare sold at a…

A: Given : When Unit Price of Good K is $10, total units sold is 100 units. When Unit Price of Good K…

Q: The supply of product X is perfectly inelastic if the price of X rises by Multiple Choice 4 percent…

A: Perfect inelastic supply means there is inelastic supply irrespective of the change in price. It…

Q: All of the following are substitutes except a. clothing and motor vehicles. b. traveling by…

A: According to the Bartleby guideline, we can solve only one question per session, and above you wrote…

Q: You find a new way to organise the business that reduces the cost of delivering a pizza. You believe…

A: Initially the price of Pizza = $12 Final price after the decrease in price = $10 Elasticity of…

Q: Given the following information Qp = 240 – 5P Qs = P where Qp is the quantity demanded, Qs is the…

A: The highest wage the buyer is willing to pay is the "buyers reservation price". The lowest price the…

Q: Looking at the output market, a decrease in the price of a factor of production will cause Group of…

A: Labor, capital and Land are examples of factors of production.

Q: QUESTION 15 The price elasticity of demand is a measure of how much the quantity demanded of a good…

A: The price elasticity of demand is the ratio of percentage change in quantity demanded and percentage…

Q: If the change from D1 to D2 was caused by an increase in consumer income, this is an inferior good.…

A: Given that the demand changed from D1 to D2, it implies that the demand has increased. This change…

Q: Diamonds are superior goods. An increase in the incomes of diamond buyers will result in an increase…

A: In consumer theory, a superior-good is a kind of normal good whose income elasticity of demand is…

Q: differentiate increase in supply vs. increase in quantity supplied.

A: Meaning of Supply: The term supply refers to the situation under which a seller produces a product…

Q: Question 20.20. Movie theaters charge lower prices to see a movie in the afternoon than in the…

A: The elasticity of demand represents the degree of responsiveness of quantity demanded and price. It…

Question

Microeconomics homework question

11.
Suppose that your demand schedule for DVDS is a follows:
Quantity demanded
(income = $10,000)
Quantity demanded
(income = $12,000)
Price
$8
40
50
10
32
45
12
24
30
14
16
20
16
8
12
a) Use the midpoint method to calculate the price elasticity of demand as the price of DVDS
increases from $8 to $10, given that your income is fixed at $10,000. Show work.
b) Use the midpoint method to calculate the income elasticity of demand as your income increases from
$10,000 to $12,000, and the price is fixed at $12. {hint: (Q2-Q1)/[(Q;+Q1)]/2 ;where I is Income}
(Iz-I1)/[(I+I1)]/2

Study of decisions made by households and business firms at an individual level. It includes several laws and theorems related to demand, supply, production, allocation of resources, and prices.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Suppose that your demand schedule for DVDs is as follows: Price Quantity Demanded (income = 10,000) Quantity Demanded (income = 12,000) 8 40 DVDs 50 DVDs 10 32 45 12 24 30 14 16 20 16 8 12 a. Use the midpoint method to calculate your price elasticity of demand as the price of DVDs increases from 8 to 10 if (i) your income is 10,000 and (ii) your income is 12,000. b. Calculate your income elasticity of demand as your income increases from 10,000 to 12,000 if (i) the price is 12 and (ii) the price is 16.
What is the formula for line cross-price elasticity of demand?
What is the price elasticity of demand? Can you explain it in your own words?
The quantity supplied of a good rises from 120 to 140 as price rises from 4 to 5.50. What is the price elasticity of supply of the good?
What is the formula for the income elasticity of demand?
Using the following equation for the demand for a good or service, calculate the price elasticity of demand (using the point form), cross-price elasticity with good x and income elasticity. Q=82P+0.10I+Px Q is quantity demanded, P is the product price. P1 is the price of a related good, and I is income. Assume that P= $10, I = 100, and Px = 20.
What does a price elasticity of demand of 0.39 mean?
(Other Elasticity Measures) Complete each of the following sentences: a. The income elasticity of demand measures, for a given price, the __________ in quantity demanded divided by the __________ income from which it resulted. b. If a decrease in the price of one good causes a decrease in demand for another good, the two goods are __________. c. If the value of the cross-price elasticity of demand between two goods is approximately zero, they are considered __________.