Microeconomics (9th Edition) (Pearson Series in Economics)
9th Edition
ISBN: 9780134184241
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
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Textbook Question
Chapter 2, Problem 9E
In Example 2.8 (page 52), we discussed the recent decline in world demand for copper, due in part to China’s decreasing consumption. What would happen, however, if China’s demand were increasing?
- a. Using the original
elasticities of demand and supply (i.e., ES = 1.5 and ED = −0.5), calculate the effect of a 20-percent increase in copper demand on theprice of copper. - b. Now calculate the effect of this increase in demand on the
equilibrium quantity , Q*. - c. As we discussed in Example 2.8, the U.S. production of copper declined between 2000 and 2003. Calculate the effect on the equilibrium price and quantity of both a 20-percent increase in copper demand (as you just did in part a) and of a 20-percent decline in copper supply.
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Suppose you are advising an industry association on the predicted effects of a price change on quantity demanded and total expenditure on its product. The current price is
$1.20 per unit, and quantity demanded is 2500 units per day. Based on extensive empirical studies, you know that price elasticity of demand for the product is 0.7. If the price
increases to $2.20 per unit, what is the predicted percentage change in quantity demanded? Will total expenditure increase or decrease? (Remember to use the averaging
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Total expenditure is
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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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