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The following is a demand schedule for shoes:

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Question

Problem 1;The following is a demand schedule for shoes: Price: $100 $80 %60 $40 $20 Quantity: 10 14 18 22 26;(a) illustrate the demand curve. (b) How much will consumers spend on shoes at a price of $80? (c)As price drops from $100 to $80, is the demand elastic or inelastic? Show your work or reasoning.;Problem 2;Advertisers convince people that to be stylish they need twice as many shoes. (a) redraw the demand curve. (b) How much will consumers now spend on shoes at a price of $80? (c) As price drops from $100 to $80, how does elasticity change as opposed to problem 1? Why?;Problem 4;Identify three goods for which your demamd s (a) elastic and (b) elastic. What accounts for the difference in elasticity? Explain throughly.;Problem 3;According to the table below, how large of a tax-induced price increase would it take to reduce cigarette consumption by 20 percent? Show your work.;Type of elasticity - estimate;relatively elastic (E>1);airline travel, long run 2.4;fresh fish 2.2;new cars, short run 1.2-1.5;unitary elastic (E=1);private education 1.1;radios and televisions 1.2;shoes 0.9;Relatively inelastic (E<1);cigarettes 0.4;coffee 0.3;gasoline, short run 0.2;long-distance telephone calls 0.1

 

Paper#30703 | Written in 18-Jul-2015

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