2. (a) Suppose that business travelers and vacationers have the following demand for airline tickets. Quantity Demanded (business travelers) 2100 tickets Quantity Demanded (vacationers) 1000 tickets Price $150 200 2000 800 250 1900 600 300 1800 400 As the price of tickets rises from $200 to $250, what is the price elasticity of demand for (i) business travelers and (ii) vacationers? (Use the midpoint method in your calculations & interpret the results) • Why might vacationers have a different elasticity from business travelers? (b) "A good harvest will generally lower the income of farmers". Illustrate this proposition using a supply and demand diagram.
2. (a) Suppose that business travelers and vacationers have the following demand for airline tickets. Quantity Demanded (business travelers) 2100 tickets Quantity Demanded (vacationers) 1000 tickets Price $150 200 2000 800 250 1900 600 300 1800 400 As the price of tickets rises from $200 to $250, what is the price elasticity of demand for (i) business travelers and (ii) vacationers? (Use the midpoint method in your calculations & interpret the results) • Why might vacationers have a different elasticity from business travelers? (b) "A good harvest will generally lower the income of farmers". Illustrate this proposition using a supply and demand diagram.
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 2PA
Related questions
Question
![2. (a) Suppose that business travelers and vacationers have the following demand for airline
tickets.
Quantity Demanded
(vacationers)
1000 tickets
Price
Quantity Demanded
(business travelers)
2100 tickets
$150
200
250
2000
800
1900
1800
600
300
400
As the price of tickets rises from $200 to $250, what is the price elasticity of demand
for (i) business travelers and (ii) vacationers? (Use the midpoint method in your
calculations & interpret the results)
Why might vacationers have a different elasticity from business travelers?
(b) “A good harvest will generally lower the income of farmers". Ilustrate this
proposition using a supply and demand diagram.
GOOD LUCK](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F85676e95-41b5-495d-88d0-21f8aa1c5474%2F13b863a5-2780-4bfb-8887-ea745a832951%2Fbeanqxl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:2. (a) Suppose that business travelers and vacationers have the following demand for airline
tickets.
Quantity Demanded
(vacationers)
1000 tickets
Price
Quantity Demanded
(business travelers)
2100 tickets
$150
200
250
2000
800
1900
1800
600
300
400
As the price of tickets rises from $200 to $250, what is the price elasticity of demand
for (i) business travelers and (ii) vacationers? (Use the midpoint method in your
calculations & interpret the results)
Why might vacationers have a different elasticity from business travelers?
(b) “A good harvest will generally lower the income of farmers". Ilustrate this
proposition using a supply and demand diagram.
GOOD LUCK
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