Microeconomics (9th Edition) (Pearson Series in Economics)
9th Edition
ISBN: 9780134184241
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
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Chapter 2, Problem 10RQ
In a discussion of tuition rates, a university official argues that the demand for admission is completely price inelastic. As evidence, she notes that while the university has doubled its tuition (in real terms) over the past 15 years, neither the number nor quality of students applying has decreased. Would you accept this argument? Explain briefly. (Hint: The official makes an assertion about the demand for admission, but does she actually observe a demand curve? What else could be going on?)
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Question 2
In a discussion of tuition rates, a university official argues that the demand for admission is
completely price inelastic. As evidence, she notes that while the university has doubled its
tuition (in real terms) over the past 15 years, neither the number nor quality of students applying
has decreased. Would you accept this argument? Explain briefly. (Hint 1: The official makes
an assertion about the demand for admission, but does she actually observe a demand curve?
What else could be going on? Hint 2: Think about the existence of potential substitutes.)
You have been appointed as an economic advisor to the principle of Bright Sparks College, a firm operating in the market for tertiary education. Over the past 18 months the following simultaneous changes have been noticed in the market for tertiary education: A decrease in consumer income; An increase in the cost of providing tertiary education services.
Explain, with the aid of a graph, the impact of the above changes on the equilibrium price and equilibrium quantity in the tertiary education market.(Note: Seven marks for a graph and 8 marks for the explanation.)
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1) You are the admissions director at a
college. You know there is high demand
for your product. However, you only have
space for a certain number of students.
USE Some of the KEY TERMS listed to
explain why you would (or would not)
increase the price of attendance.
2) You are the admission director at a
College. How do you convince graduating
high school seniors to attend your college,
instead of the University of Georgia. USE
the KEY TERMS in the chapter.
KEY TERMS are opportunity cost,
budget constraint, comparative
advantage, marginal analysis,
opportunity set, positive statement,
utility, allocative efficiency, invisible
hand.
Chapter 2 Solutions
Microeconomics (9th Edition) (Pearson Series in Economics)
Ch. 2 - Prob. 1RQCh. 2 - Prob. 2RQCh. 2 - If a 3-percent increase in the price of corn...Ch. 2 - Prob. 4RQCh. 2 - Explain why for many goods, the long-run price...Ch. 2 - Why do long-run elasticities of demand differ from...Ch. 2 - Prob. 7RQCh. 2 - Prob. 8RQCh. 2 - Prob. 9RQCh. 2 - In a discussion of tuition rates, a university...
Ch. 2 - Suppose the demand curve for a product is given by...Ch. 2 - Prob. 12RQCh. 2 - Prob. 13RQCh. 2 - Prob. 1ECh. 2 - Consider a competitive market for which the...Ch. 2 - Prob. 3ECh. 2 - Prob. 4ECh. 2 - Prob. 5ECh. 2 - Prob. 6ECh. 2 - In 2010, Americans smoked 315 billion cigarettes,...Ch. 2 - In Example 2.8 we examined the effect of a...Ch. 2 - In Example 2.8 (page 52), we discussed the recent...Ch. 2 - Prob. 12E
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Elasticity of Demand- Micro Topic 2.3; Author: Jacob Clifford;https://www.youtube.com/watch?v=HHcblIxiAAk;License: Standard YouTube License, CC-BY