What is the price elasticity of demand

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Reference no: EM133275912

Questions -

Q1. If the price changes from $4.75 to $5.25 and the quantity demanded changes from 1,025 to 975 units, then what is the price elasticity of demand? (Use the midpoint formula.)

Q2. A farmer can produce 10,000 pears if he uses the whole of his one-acre farmland. If he uses the same land for apple cultivation, a total of 5,000 apples can be produced. However, he decides to produce both, and the opportunity cost of producing either fruit is constant. If his production possibility frontier (PPF) is graphed with apples on the Y-axis and pears on the X-axis, what will be the slope of this PPF?

Q3. A farmer can produce 10,000 pears on his one-acre farmland, and when he uses the same land for apple cultivation, a total of 5,000 apples can be produced. He realizes that with the introduction of a new fertilizer, he can increase the maximum production of apples to 7,000. The maximum production of pears, however, remains unchanged. Given that his production possibility frontier (PPF) is linear and apples are graphed on the Y-axis and pears on the X-axis calculate the slope of his PPF.

Reference no: EM133275912

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