1. The price of a good rises from $6 to $8. Thus, the quantity demanded of that good falls from 150 to 75 units. Using the point-slope formula, calculate the Price Elasticity of Demand. Note: You’ll use this answer to help you with Question 2 & 3 (coming up next). A. -1.50 B. -0.66 C. -2 D. -0.04 E. -25 F. -1 2. Given your response in Question 1, classify the coefficient of the Price Elasticity of Demand. A. Elastic B. Inelastic C. Perfectly Elastic D. Perfectly Inelastic E. Unit Elastic 3. Which of the following statements is the best interpretation of the coefficient of the Price Elasticity of Demand in Question 1? A. There will be a 0.66 percent decrease in the Quantity Demanded. B. A 1 percent increase in the Price of a good corresponds to a 0.66 percent decrease in the Quantity Demanded for that good. C. A 1 percent increase in the Price of a good corresponds to a 1.55 percent increase in the Quantity Demanded for that good. D. Given the Price increase of a good, there will be no change in the Quantity Demanded for that good. E. Given the Price increase of a good, there will be an inelastic response. F. A 1 percent increase in the Price of a good corresponds to a 1.55 percent decrease in the Quantity Demanded for that good

Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Elastic And Its Application
Section: Chapter Questions
Problem 1QR
icon
Related questions
Question

1. The price of a good rises from $6 to $8. Thus, the quantity demanded of that good falls from 150 to 75 units. Using the point-slope formula, calculate the Price Elasticity of Demand. Note: You’ll use this answer to help you with Question 2 & 3 (coming up next).

 

A. -1.50

 

B. -0.66

 

C. -2

 

D. -0.04

 

E. -25

 

F. -1

 

2. Given your response in Question 1, classify the coefficient of the Price Elasticity of Demand.

 

A. Elastic

 

B. Inelastic

 

C. Perfectly Elastic

 

D. Perfectly Inelastic

 

E. Unit Elastic

 

3. Which of the following statements is the best interpretation of the coefficient of the Price Elasticity of Demand in Question 1?

 

A. There will be a 0.66 percent decrease in the Quantity Demanded.

 

B. A 1 percent increase in the Price of a good corresponds to a 0.66 percent decrease in the Quantity Demanded for that good.

 

C. A 1 percent increase in the Price of a good corresponds to a 1.55 percent increase in the Quantity Demanded for that good.

 

D. Given the Price increase of a good, there will be no change in the Quantity Demanded for that good.

 

E. Given the Price increase of a good, there will be an inelastic response.

 

F. A 1 percent increase in the Price of a good corresponds to a 1.55 percent decrease in the Quantity Demanded for that good

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Elasticity of demand
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
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Micro Economics For Today
Micro Economics For Today
Economics
ISBN:
9781337613064
Author:
Tucker, Irvin B.
Publisher:
Cengage,
Principles of Economics 2e
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Microeconomics (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:
9781305971493
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Microeconomics
Principles of Microeconomics
Economics
ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning