Why is elasticity of demand useful in policy decisions

Assignment Help Microeconomics
Reference no: EM13237119

a. Given f = dQ/dP · P/Q, where D = Q = 700 - 4P, what is the price, total revenue, and elasticity at Q = 100?

b. Let X = 120, a = 1, and ß = -3. Solve and explain X = aPxß. If D = X = 300 - 2P, can elasticity be calculated from this equation? What happens if X is allowed to change?

c. Why is elasticity of demand, useful in policy decisions? Consider both price elasticity of demand and income elasticity of demand.

d. Using graphs to illustrate your explanations of elasticity of demand, when elasticity changes and when it does not?

Reference no: EM13237119

Questions Cloud

Explain what is the change in internal energy of the system : If a system has 2.50 × 102 kcal of work done to it, and releases 5.00 × 102 kJ of heat into its surroundings, what is the change in internal energy of the system
What is the number of replications : What is the number of replications for each of the main treatment factors and their interaction and what do you conclude from the overall ANOVA analysis
What is the capacitance of this capacitor : A capacitor can be made from two sheets of aluminum foil separated by a sheet of waxed paper. what is the capacitance of this capacitor
Aqueous solutions has the strongest ion-dipole attractions : aqueous solutions has the strongest ion-dipole attractions: 0.3 M FeBr3, 0.6 M CaCl2, 0.5 M Ba(NO3)2, 0.2 M (NH4)2SO4, 0.9 M KOH.
Why is elasticity of demand useful in policy decisions : Why is elasticity of demand, useful in policy decisions Consider both price elasticity of demand and income elasticity of demand. Using graphs to illustrate your explanations of elasticity of demand, when elasticity changes and when it does not
Find the acceleration of the bullet : A bullet is fired through a board 10.0 cm thick in such a way that the bullet's line of motion is perpendicular to the face of the board, Find the acceleration of the bullet as it passes through the board
Explain the species resonance is an important property : Explain for which of the following species resonance is an important property: HONO, HONO2, N3-, NO2-, NO2.
How could hrm professionals affect the driving : How could HRM professionals affect the driving and restraining forces in human capital management, to support a global competitive advantage for your industry or organization?
Determine what is the consumer constrained by points : Given PxX + PyY = I and the information in question one above and a point system where px = 2, py = 8 and the number of points available is 450, is the consumer constrained by points If so, what is the consumption point

Reviews

Write a Review

Microeconomics Questions & Answers

  How the imf establishes economic stability

Why has the global capital market grown so rapidly recently?  Do you expect it to continue to grow and what are the risks that might be associated with investing in the Global Capital Market?

  Why some people obtain extra education while others do not

Conduct a cost-benefit analysis of obtaining a graduate degree. Assess both the short-term and the long-term costs and benefits to determine why some people obtain the extra education while others do not.

  Explain how financial institutions fit in the circular flow

Explain how financial institutions fit into the circular flow diagram (and more specifically why they are important for economic stability and growth). In your own words, explain why financial institutions (and, by extension, financial markets)

  Calculate the values of change in consumer surplus

Draw a graph to analyse the effects of 40 per cent tariff rate in Korea on the price, domestic supply of and demand for beef, and compare the situation with no tariff case.

  What is the change in clean springs profit-maximizing levels

Suppose the Clean Springs Water Company has a monopoly on bottled water sales in California. If the price of tap water increases, what is the change in Clean Springs profit-maximizing levels of output, price, and profit

  What will be the domestic price-consumption and production

Now suppose the government decides to subsidize the production of sugar (regardless of who it is sold to). The government wants to achieve the same increase in domestic production as in part d). What should be the amount of such production subsidy..

  Discuss the function performed by a financial intermediary

Discuss the function performed by a financial intermediary in linking surplus and deficit units in the financial market. What will happen in the financial market if the financial intermediary does not exist

  Income statement for sizzling foods

Which of the following would lead to a DECREASE in the demand for tennis balls and marv has a Bachelor of Science degree in mechanical engineering and could be earning $30,000 annually as mechanical engineer.

  Who are the winners and losers from trade restrictions

How can two countries both be better off as a result of trade? How can tariffs protect U.S. jobs? Do tariffs lead to a net increase in jobs? Explain. Who are the winners and losers from trade restrictions? Given that trade restrictions impose loss..

  Pricing factors of production-economic rent

Three machines are employed in isolated area. They each produce 2,000 units of output per month, the first requiring $20,000 in raw materials, the second $25,000, and third $28,000.

  What is best for nation as whole tariff-quota or free trade

1. Describe both quotas and tariffs. How do they impact domestic prices and deadweight loss  How does an import quota differ from an equivalent tariff What is best for a nation as a whole: a tariff, a quota, or free trade

  Perfect competition is a model

Perfect Competition is a model of which examples are few and far between. Yet economists love to discuss this model. Explain why.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd