ECON 201 Section 4
Handout 11-1 (10 points)
Calculate the elasticity for the demand schedule below by using the midpoint method. State whether the measure is elastic, unit elastic, or inelastic.
|
Price |
Quantity |
Elasticity |
Elastic, Unit Elastic, or Inelastic? |
|
$22 |
200 |
|
|
|
$20 |
300 |
|
|
|
$18 |
400 |
|
|
|
$16 |
500 |
|
|
|
$14 |
600 |
|
|
|
$12 |
700 |
|
|
|
$10 |
800 |
|
|
Do you expect this demand curve to be fairly steep or fairly flat?
Handout 12-1 (10 points)
Ranking Goods by Their Price Elasticity (5–10 minutes)
Rank the following six goods from 1 to 6 in order of most elastic (1) to least elastic (6):
______Salt
______Audi A4 car
______A doctor’s visit
______T-bone steaks
______A luxury room at the Crowne Plaza hotel
______Electricity
Why did you rank number 6 as least elastic?
Why did you rank number 1 as most elastic?