- Introduction
- 1.1 What Is Economics, and Why Is It Important?
- 1.2 Microeconomics and Macroeconomics
- 1.3 How Economists Use Theories and Models to Understand Economic Issues
- 1.4 How To Organize Economies: An Overview of Economic Systems
- Key Concepts and Summary
- Self-Check Questions
- Review Questions
- Critical Thinking Questions
- Introduction to Choice in a World of Scarcity
- 2.1 How Individuals Make Choices Based on Their Budget Constraint
- 2.2 The Production Possibilities Frontier and Social Choices
- 2.3 Confronting Objections to the Economic Approach
- Introduction to Demand and Supply
- 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services
- 3.2 Shifts in Demand and Supply for Goods and Services
- 3.3 Changes in Equilibrium Price and Quantity: The Four-Step Process
- 3.4 Price Ceilings and Price Floors
- 3.5 Demand, Supply, and Efficiency
- Introduction to Labor and Financial Markets
- 4.1 Demand and Supply at Work in Labor Markets
- 4.2 Demand and Supply in Financial Markets
- 4.3 The Market System as an Efficient Mechanism for Information
- Introduction to Elasticity
- 5.1 Price Elasticity of Demand and Price Elasticity of Supply
- 5.2 Polar Cases of Elasticity and Constant Elasticity
- 5.3 Elasticity and Pricing
- 5.4 Elasticity in Areas Other Than Price
- Introduction to Consumer Choices
- 6.1 Consumption Choices
- 6.2 How Changes in Income and Prices Affect Consumption Choices
- 6.3 Behavioral Economics: An Alternative Framework for Consumer Choice
- Introduction to Production, Costs, and Industry Structure
- 7.1 Explicit and Implicit Costs, and Accounting and Economic Profit
- 7.2 Production in the Short Run
- 7.3 Costs in the Short Run
- 7.4 Production in the Long Run
- 7.5 Costs in the Long Run
- Introduction to Perfect Competition
- 8.1 Perfect Competition and Why It Matters
- 8.2 How Perfectly Competitive Firms Make Output Decisions
- 8.3 Entry and Exit Decisions in the Long Run
- 8.4 Efficiency in Perfectly Competitive Markets
- Introduction to a Monopoly
- 9.1 How Monopolies Form: Barriers to Entry
- 9.2 How a Profit-Maximizing Monopoly Chooses Output and Price
- Introduction to Monopolistic Competition and Oligopoly
- 10.1 Monopolistic Competition
- 10.2 Oligopoly
- Introduction to Monopoly and Antitrust Policy
- 11.1 Corporate Mergers
- 11.2 Regulating Anticompetitive Behavior
- 11.3 Regulating Natural Monopolies
- 11.4 The Great Deregulation Experiment
- Introduction to Environmental Protection and Negative Externalities
- 12.1 The Economics of Pollution
- 12.2 Command-and-Control Regulation
- 12.3 Market-Oriented Environmental Tools
- 12.4 The Benefits and Costs of U.S. Environmental Laws
- 12.5 International Environmental Issues
- 12.6 The Tradeoff between Economic Output and Environmental Protection
- Introduction to Positive Externalities and Public Goods
- 13.1 Why the Private Sector Underinvests in Innovation
- 13.2 How Governments Can Encourage Innovation
- 13.3 Public Goods
- Introduction to Labor Markets and Income
- 14.1 The Theory of Labor Markets
- 14.2 Wages and Employment in an Imperfectly Competitive Labor Market
- 14.3 Market Power on the Supply Side of Labor Markets: Unions
- 14.4 Bilateral Monopoly
- 14.5 Employment Discrimination
- 14.6 Immigration
- Introduction to Poverty and Economic Inequality
- 15.1 Drawing the Poverty Line
- 15.2 The Poverty Trap
- 15.3 The Safety Net
- 15.4 Income Inequality: Measurement and Causes
- 15.5 Government Policies to Reduce Income Inequality
- Introduction to Information, Risk, and Insurance
- 16.1 The Problem of Imperfect Information and Asymmetric Information
- 16.2 Insurance and Imperfect Information
- Introduction to Financial Markets
- 17.1 How Businesses Raise Financial Capital
- 17.2 How Households Supply Financial Capital
- 17.3 How to Accumulate Personal Wealth
- Introduction to Public Economy
- 18.1 Voter Participation and Costs of Elections
- 18.2 Special Interest Politics
- 18.3 Flaws in the Democratic System of Government
- Introduction to International Trade
- 19.1 Absolute and Comparative Advantage
- 19.2 What Happens When a Country Has an Absolute Advantage in All Goods
- 19.3 Intra-industry Trade between Similar Economies
- 19.4 The Benefits of Reducing Barriers to International Trade
- Introduction to Globalization and Protectionism
- 20.1 Protectionism: An Indirect Subsidy from Consumers to Producers
- 20.2 International Trade and Its Effects on Jobs, Wages, and Working Conditions
- 20.3 Arguments in Support of Restricting Imports
- 20.4 How Governments Enact Trade Policy: Globally, Regionally, and Nationally
- 20.5 The Tradeoffs of Trade Policy
- A | The Use of Mathematics in Principles of Economics
- B | Indifference Curves
- C | Present Discounted Value
From point B to point C, price rises from $70 to $80, and Qd decreases from 2,800 to 2,600. So:
The demand curve is inelastic in this area; that is, its elasticity value is less than one.
Answer from Point D to point E:
Answer from Point G to point H:
The demand curve is elastic in this interval.
From point J to point K, price rises from $8 to $9, and quantity rises from 50 to 70. So:
The supply curve is elastic in this area; that is, its elasticity value is greater than one.
From point L to point M, the price rises from $10 to $11, while the Qs rises from 80 to 88:
The supply curve has unitary elasticity in this area.
From point N to point P, the price rises from $12 to $13, and Qs rises from 95 to 100:
The supply curve is inelastic in this region of the supply curve.
The demand curve with constant unitary elasticity is concave because the absolute value of declines in price are not identical. The left side of the curve starts with high prices, and then price falls by smaller amounts as it goes down toward the right side. This results in a slope of demand that is steeper on the left but flatter on the right, creating a curved, concave shape.
The constant unitary elasticity is a straight line because the curve slopes upward and both price and quantity are increasing proportionally.
Carmakers can pass this cost along to consumers if the demand for these cars is inelastic. If the demand for these cars is elastic, then the manufacturer must pay for the equipment.
If the elasticity is 1.4 at current prices, you would advise the company to lower its price on the product, since a decrease in price will be offset by the increase in the amount of the drug sold. If the elasticity were 0.6, then you would advise the company to increase its price. Increases in price will offset the decrease in number of units sold, but increase your total revenue. If elasticity is 1, the total revenue is already maximized, and you would advise that the company maintain its current price level.
The percentage change in quantity supplied as a result of a given percentage change in the price of gasoline.
In this example, bread is an inferior good because its consumption falls as income rises.
The formula for cross-price elasticity is % change in Qd for apples / % change in P of oranges. Multiplying both sides by % change in P of oranges yields:
% change in Qd for apples = cross-price elasticity X% change in P of oranges
= 0.4 × (–3%) = –1.2%, or a 1.2 % decrease in demand for apples.
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- Authors: Steven A. Greenlaw, David Shapiro
- Publisher/website: OpenStax
- Book title: Principles of Microeconomics 2e
- Publication date: Sep 15, 2017
- Location: Houston, Texas
- Book URL: https://openstax.org/books/principles-microeconomics-2e/pages/1-introduction
- Section URL: https://openstax.org/books/principles-microeconomics-2e/pages/chapter-5
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Microeconomics
Unit 1: basic economic concepts, unit 2: supply, demand, and market equilibrium, unit 3: elasticity, unit 4: consumer and producer surplus, market interventions, and international trade, unit 5: consumer theory, unit 6: production decisions and economic profit, unit 7: forms of competition, unit 8: factor markets, unit 9: market failure and the role of government.
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Microeconomics Ch 5 Homework 30 terms andrewfarmr Preview Microeconomics Unit 3 Part 2
For "microeconomics chapter 5 homework" Quizlet has study tools to help you learn anything. Improve your grades and reach your goals with flashcards, practice tests and expert-written solutions today.
Introduction to Demand and Supply; 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services; 3.2 Shifts in Demand and Supply for Goods and Services; 3.3 Changes in Equilibrium Price and Quantity: The Four-Step Process; 3.4 Price Ceilings and Price Floors; 3.5 Demand, Supply, and Efficiency; Key Terms; Key Concepts and Summary; Self-Check Questions; Review Questions
Study with Quizlet and memorize flashcards containing terms like Suppose the quantity demanded of cars falls from 8.0 million to 7.0 million as a result of a price increase from $50,000 to $55,000 per car. The absolute value of the price elasticity of demand is closest to, Suppose the quantity demanded of cars falls from 6.0 million to 5.0 million as a result of a price increase from $30,000 ...
CH5 Problem 1PA Step-by-step solution Step 1 of 5 Elasticity of demand is defined as the increase or decrease on the demand of a good due to the change in the price of the good. Demand is said to be elastic if demand changes a lot when the prices changes. Step 2 of 5 (a) Required textbooks are a necessity and have no close substitutes.
Chapter 5 homework - Microeconomics. Chapter 5 homework assignment. Course. Principles Of Economics (Micro) (ECON 0202) 11 Documents. Students shared 11 documents in this course. University Missouri Southern State University. Academic year: 2021/2022. Uploaded by: Anonymous Student.
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AP®︎/College Microeconomics 7 units · 54 skills. Unit 1 Basic Economic Concepts. Unit 2 Supply and Demand. Unit 3 Production, cost, and the perfect competition model. Unit 4 Imperfect competition. Unit 5 Factor markets. Unit 6 Market failure and the role of government. Unit 7 AP®︎ Microeconomics Standards mappings.
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Microeconomics 9 units · 44 skills. Unit 1 Basic economic concepts. Unit 2 Supply, demand, and market equilibrium. Unit 3 Elasticity. Unit 4 Consumer and producer surplus, market interventions, and international trade. Unit 5 Consumer theory. Unit 6 Production decisions and economic profit. Unit 7 Forms of competition. Unit 8 Factor markets.
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1. Demand is said to be price elastic if the price of the good responds substantially to changes in demand. elasticity of demand likely highest? 2 - Chapter 2 Learning Objectives Chapter 5 quiz description chapter instructions choose the alternative that best answers the question or completes the statement. timed test this test has time
Step-by-step solution Step 1 of 2 Equilibrium occurs when there is no excess supply or demand in a market. The intersection point of supply and demand curves illustrates the concept of equilibrium. Step 2 of 2 Although supply and demand curves are always shifting, the concept of equilibrium is not useless.
... The greater the elasticity value, the more sensitive quantity demanded is to price. Midpoint formula (Instead of dividing the change in a variable by it's starting value) divide the change by the AVERAGE of its starting and ending values % change in price= (P1-P0)/ [ (P1+P0]/2) %change in QDemanded= (Q1-Q0)/ [ (Q1+Q0]/2)
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Here, is the marginal utility of leisure, is the marginal utility of income, and is the wage. Step 3 of 6. A Cobb-Douglas utility function takes the form. Step 4 of 6. Substitute the values of and from (1) and (2). Step 5 of 6. Differentiate the utility function with respect to and set it equal to zero . Step 6 of 6.
1 MICROECONOMICS - CHAPTER 5 HOMEWORK -SHOW YOUR WORK 5X2=10 Points . 1. Draw a demand curve for a good which has a perfectly inelastic demand. Explain why it has the shape that it does. 2. Lehigh University has just lowered the price of its season football tickets from $350.00 to $300.00.
Exercise 1 Exercise 2 Exercise 3 Exercise 4 Exercise 5 Exercise 6 Exercise 7 Exercise 8 Exercise 9 Exercise 10 Chapter 2: Thinking Like an Economist Page 35: Quick Check Multiple Choice Page 35: Questions for Review Page 35: Problems and Applications Exercise 1 Exercise 2 Exercise 3 Exercise 4
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