{"id":9662,"date":"2022-04-13T23:39:14","date_gmt":"2022-04-13T23:39:14","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-microeconomics\/?post_type=chapter&p=9662"},"modified":"2024-09-11T16:43:29","modified_gmt":"2024-09-11T16:43:29","slug":"module-5-assignment-problem-set-elasticity","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wm-microeconomics\/chapter\/module-5-assignment-problem-set-elasticity\/","title":{"raw":"Module 5 Assignment: Problem Set \u2014 Elasticity","rendered":"Module 5 Assignment: Problem Set \u2014 Elasticity"},"content":{"raw":"Click on the link to download the problem set for this module:\u00a0Elasticity Problem Set.<\/a>\r\n

Elasticity Problem Set[1]<\/strong><\/a><\/sup><\/h2>\r\n

Use the following information to answer questions 1 through 7:<\/h3>\r\nWhen the local grocery store puts cereal on sale, reducing its price from $4.40 per item to $3.40 per item, the quantity sold increases from 220 per week to 230 per week.\r\n
    \r\n \t
  1. This illustrates the ________________ elasticity of _________________.<\/li>\r\n \t
  2. What formula is used to determine the percentage change in quantity demanded?<\/li>\r\n<\/ol>\r\n \r\n
      \r\n \t
    1. What is the percentage change in quantity demanded for the cereals described above?<\/li>\r\n<\/ol>\r\n \r\n
        \r\n \t
      1. What formula is used to determine the percentage change in price?<\/li>\r\n<\/ol>\r\n \r\n
          \r\n \t
        1. Calculate the percentage change in price for the cereal.<\/li>\r\n<\/ol>\r\n \r\n
            \r\n \t
          1. Finally, using the whole formula, calculate the value of the price elasticity of demand for cereal.<\/li>\r\n<\/ol>\r\n \r\n
              \r\n \t
            1. Explain what this result means in words.<\/li>\r\n<\/ol>\r\n

              Use the following information to answer questions 8 and 9:<\/h3>\r\nSuppose that a store decreases the price of laundry detergent from $4.10 to $3.50. As a result, quantity demanded increases from 210 to 230.\r\n
                \r\n \t
              1. Using the mid-point approach, calculate the percentage change in price.<\/li>\r\n<\/ol>\r\n \r\n
                  \r\n \t
                1. Using the mid-point elasticity approach, calculate price elasticity of demand. Your answer should be expressed in absolute value terms.<\/li>\r\n<\/ol>\r\n \r\n

                  Use the following information to answer questions 10 and 11:<\/h3>\r\nConsider the following demand schedule for shoes.\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
                  Price<\/td>\r\nQuantity Demanded<\/td>\r\n<\/tr>\r\n
                  $5<\/td>\r\n385<\/td>\r\n<\/tr>\r\n
                  $10<\/td>\r\n365<\/td>\r\n<\/tr>\r\n
                  $15<\/td>\r\n345<\/td>\r\n<\/tr>\r\n
                  $20<\/td>\r\n325<\/td>\r\n<\/tr>\r\n
                  $25<\/td>\r\n305<\/td>\r\n<\/tr>\r\n
                  $30<\/td>\r\n285<\/td>\r\n<\/tr>\r\n
                  $35<\/td>\r\n265<\/td>\r\n<\/tr>\r\n
                  $40<\/td>\r\n245<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n \r\n
                    \r\n \t
                  1. Suppose that the store increases the price of shoes from $25 to $30. Using the mid-point approach, calculate price elasticity of demanded.<\/li>\r\n<\/ol>\r\n\u00a0<\/strong>\r\n
                      \r\n \t
                    1. Suppose that the store increases the price of shoes from $25 to $30. Based on this information, the demand curve would be classified as (select one):\r\n
                        \r\n \t
                      1. inelastic<\/li>\r\n \t
                      2. elastic<\/li>\r\n \t
                      3. unit elastic<\/li>\r\n<\/ol>\r\n<\/li>\r\n<\/ol>\r\n \r\n
                          \r\n \t
                        1. Suppose that when the price of laundry detergent decreases from $4.10 to $3.50, quantity supplied decreases from 260 to 180.<\/li>\r\n<\/ol>\r\n \r\n\r\nUsing the mid-point elasticity approach, calculate price elasticity of supply.\u00a0<\/strong>\r\n
                            \r\n \t
                          1. Consider the following supply schedule for shoes.<\/li>\r\n<\/ol>\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
                            Price<\/td>\r\nQuantity Supplied<\/td>\r\n<\/tr>\r\n
                            $5<\/td>\r\n425<\/td>\r\n<\/tr>\r\n
                            $10<\/td>\r\n445<\/td>\r\n<\/tr>\r\n
                            $15<\/td>\r\n465<\/td>\r\n<\/tr>\r\n
                            $20<\/td>\r\n485<\/td>\r\n<\/tr>\r\n
                            $25<\/td>\r\n505<\/td>\r\n<\/tr>\r\n
                            $30<\/td>\r\n525<\/td>\r\n<\/tr>\r\n
                            $35<\/td>\r\n545<\/td>\r\n<\/tr>\r\n
                            $40<\/td>\r\n565<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nSuppose that the price of shoes increases from $25 to $30.\u00a0 Using the mid-point approach, calculate price elasticity of supply.\r\n
                              \r\n \t
                            1. Suppose that when income increases from $2900 to $3250, quantity demanded changes from 210 to 270. Using the mid-point elasticity approach, calculate income elasticity.<\/li>\r\n<\/ol>\r\n \r\n
                                \r\n \t
                              1. Suppose that the income increases from $2900 to $3250. As a result, quantity demanded changes from 210 to 270.<\/li>\r\n<\/ol>\r\n \r\n\r\nBased on this information you can tell that this product is (select one):\r\n
                                  \r\n \t
                                1. a complement<\/li>\r\n \t
                                2. normal<\/li>\r\n \t
                                3. a substitute<\/li>\r\n \t
                                4. inferior<\/li>\r\n<\/ol>\r\n \r\n
                                    \r\n \t
                                  1. Suppose that the price of one product increases from $11 to $42. As a result, quantity demanded for another product changes from 260 to 180.<\/li>\r\n<\/ol>\r\n \r\n\r\nBased on this information you can tell that these two products are (select one):\r\n
                                      \r\n \t
                                    1. complements<\/li>\r\n \t
                                    2. normal<\/li>\r\n \t
                                    3. substitutes<\/li>\r\n \t
                                    4. inferior<\/li>\r\n<\/ol>\r\n \r\n
                                        \r\n \t
                                      1. Suppose that when the store increases the price of laundry detergent from $2.50 to $3.90, quantity demanded decreased from 210 to 130.<\/li>\r\n<\/ol>\r\n \r\n

                                        What is the change in total revenue as a result of this price change?\u00a0 Make sure to include a negative sign in your answer if necessary.<\/p>\r\n \r\n

                                          \r\n \t
                                        1. Suppose that you know that the price elasticity of demand is 1.3. If we increase the price of the this product, then the total revenue will (select one):\r\n
                                            \r\n \t
                                          1. increase<\/li>\r\n \t
                                          2. remain unchanged<\/li>\r\n \t
                                          3. decrease<\/li>\r\n<\/ol>\r\n<\/li>\r\n<\/ol>\r\n \r\n
                                            \r\n\r\n \r\n\r\n
                                            \r\n\r\n[1]<\/a> This assignment by Lumen Learning is licensed under a Creative Commons Attribution 4.0 International License. You can access an alternative means to plotting points at https:\/\/www.desmos.com\/calculator<\/a>.\r\n\r\n<\/div>","rendered":"

                                            Click on the link to download the problem set for this module:\u00a0Elasticity Problem Set.<\/a><\/p>\n

                                            Elasticity Problem Set[1]<\/strong><\/a><\/sup><\/h2>\n

                                            Use the following information to answer questions 1 through 7:<\/h3>\n

                                            When the local grocery store puts cereal on sale, reducing its price from $4.40 per item to $3.40 per item, the quantity sold increases from 220 per week to 230 per week.<\/p>\n

                                              \n
                                            1. This illustrates the ________________ elasticity of _________________.<\/li>\n
                                            2. What formula is used to determine the percentage change in quantity demanded?<\/li>\n<\/ol>\n

                                               <\/p>\n

                                                \n
                                              1. What is the percentage change in quantity demanded for the cereals described above?<\/li>\n<\/ol>\n

                                                 <\/p>\n

                                                  \n
                                                1. What formula is used to determine the percentage change in price?<\/li>\n<\/ol>\n

                                                   <\/p>\n

                                                    \n
                                                  1. Calculate the percentage change in price for the cereal.<\/li>\n<\/ol>\n

                                                     <\/p>\n

                                                      \n
                                                    1. Finally, using the whole formula, calculate the value of the price elasticity of demand for cereal.<\/li>\n<\/ol>\n

                                                       <\/p>\n

                                                        \n
                                                      1. Explain what this result means in words.<\/li>\n<\/ol>\n

                                                        Use the following information to answer questions 8 and 9:<\/h3>\n

                                                        Suppose that a store decreases the price of laundry detergent from $4.10 to $3.50. As a result, quantity demanded increases from 210 to 230.<\/p>\n

                                                          \n
                                                        1. Using the mid-point approach, calculate the percentage change in price.<\/li>\n<\/ol>\n

                                                           <\/p>\n

                                                            \n
                                                          1. Using the mid-point elasticity approach, calculate price elasticity of demand. Your answer should be expressed in absolute value terms.<\/li>\n<\/ol>\n

                                                             <\/p>\n

                                                            Use the following information to answer questions 10 and 11:<\/h3>\n

                                                            Consider the following demand schedule for shoes.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n
                                                            Price<\/td>\nQuantity Demanded<\/td>\n<\/tr>\n
                                                            $5<\/td>\n385<\/td>\n<\/tr>\n
                                                            $10<\/td>\n365<\/td>\n<\/tr>\n
                                                            $15<\/td>\n345<\/td>\n<\/tr>\n
                                                            $20<\/td>\n325<\/td>\n<\/tr>\n
                                                            $25<\/td>\n305<\/td>\n<\/tr>\n
                                                            $30<\/td>\n285<\/td>\n<\/tr>\n
                                                            $35<\/td>\n265<\/td>\n<\/tr>\n
                                                            $40<\/td>\n245<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

                                                             <\/p>\n

                                                              \n
                                                            1. Suppose that the store increases the price of shoes from $25 to $30. Using the mid-point approach, calculate price elasticity of demanded.<\/li>\n<\/ol>\n

                                                              \u00a0<\/strong><\/p>\n

                                                                \n
                                                              1. Suppose that the store increases the price of shoes from $25 to $30. Based on this information, the demand curve would be classified as (select one):\n
                                                                  \n
                                                                1. inelastic<\/li>\n
                                                                2. elastic<\/li>\n
                                                                3. unit elastic<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n

                                                                   <\/p>\n

                                                                    \n
                                                                  1. Suppose that when the price of laundry detergent decreases from $4.10 to $3.50, quantity supplied decreases from 260 to 180.<\/li>\n<\/ol>\n

                                                                     <\/p>\n

                                                                    Using the mid-point elasticity approach, calculate price elasticity of supply.\u00a0<\/strong><\/p>\n

                                                                      \n
                                                                    1. Consider the following supply schedule for shoes.<\/li>\n<\/ol>\n\n\n\n\n\n\n\n\n\n\n\n
                                                                      Price<\/td>\nQuantity Supplied<\/td>\n<\/tr>\n
                                                                      $5<\/td>\n425<\/td>\n<\/tr>\n
                                                                      $10<\/td>\n445<\/td>\n<\/tr>\n
                                                                      $15<\/td>\n465<\/td>\n<\/tr>\n
                                                                      $20<\/td>\n485<\/td>\n<\/tr>\n
                                                                      $25<\/td>\n505<\/td>\n<\/tr>\n
                                                                      $30<\/td>\n525<\/td>\n<\/tr>\n
                                                                      $35<\/td>\n545<\/td>\n<\/tr>\n
                                                                      $40<\/td>\n565<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

                                                                      Suppose that the price of shoes increases from $25 to $30.\u00a0 Using the mid-point approach, calculate price elasticity of supply.<\/p>\n

                                                                        \n
                                                                      1. Suppose that when income increases from $2900 to $3250, quantity demanded changes from 210 to 270. Using the mid-point elasticity approach, calculate income elasticity.<\/li>\n<\/ol>\n

                                                                         <\/p>\n

                                                                          \n
                                                                        1. Suppose that the income increases from $2900 to $3250. As a result, quantity demanded changes from 210 to 270.<\/li>\n<\/ol>\n

                                                                           <\/p>\n

                                                                          Based on this information you can tell that this product is (select one):<\/p>\n

                                                                            \n
                                                                          1. a complement<\/li>\n
                                                                          2. normal<\/li>\n
                                                                          3. a substitute<\/li>\n
                                                                          4. inferior<\/li>\n<\/ol>\n

                                                                             <\/p>\n

                                                                              \n
                                                                            1. Suppose that the price of one product increases from $11 to $42. As a result, quantity demanded for another product changes from 260 to 180.<\/li>\n<\/ol>\n

                                                                               <\/p>\n

                                                                              Based on this information you can tell that these two products are (select one):<\/p>\n

                                                                                \n
                                                                              1. complements<\/li>\n
                                                                              2. normal<\/li>\n
                                                                              3. substitutes<\/li>\n
                                                                              4. inferior<\/li>\n<\/ol>\n

                                                                                 <\/p>\n

                                                                                  \n
                                                                                1. Suppose that when the store increases the price of laundry detergent from $2.50 to $3.90, quantity demanded decreased from 210 to 130.<\/li>\n<\/ol>\n

                                                                                   <\/p>\n

                                                                                  What is the change in total revenue as a result of this price change?\u00a0 Make sure to include a negative sign in your answer if necessary.<\/p>\n

                                                                                   <\/p>\n

                                                                                    \n
                                                                                  1. Suppose that you know that the price elasticity of demand is 1.3. If we increase the price of the this product, then the total revenue will (select one):\n
                                                                                      \n
                                                                                    1. increase<\/li>\n
                                                                                    2. remain unchanged<\/li>\n
                                                                                    3. decrease<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n

                                                                                       <\/p>\n

                                                                                      \n

                                                                                       <\/p>\n

                                                                                      \n

                                                                                      [1]<\/a> This assignment by Lumen Learning is licensed under a Creative Commons Attribution 4.0 International License. You can access an alternative means to plotting points at https:\/\/www.desmos.com\/calculator<\/a>.<\/p>\n<\/div>\n\n\t\t\t

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                                                                                      Candela Citations<\/h3>\n\t\t\t\t\t
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                                                                                      CC licensed content, Original<\/div>