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Thomas Edison State ECO 112 Week 3 Assignment

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Question;ECO-112 GS;Assignment 3;1. Why is the;concept of elasticity important? What does it tell economists? Tell whether you;would classify automobile production as either elastic or inelastic in the;short run and long run. (Keep in mind that we are talking here about supply;elasticity, not demand elasticity.) Explain your answer using determinants of;elasticity.;2. Use the graph;shown below to answer the questions that follow. Your answer for each question;should be a letter.;a. The elastic;section of the graph is represented by section _ __.;b. The inelastic;section of the graph is represented by section __ _.;c. The unit;elastic section of the graph is represented by section _ __.;d. The portion;of the graph in which a decrease in price would cause total revenue to fall;would be _ __.;e. The portion;of the graph in which a decrease in price would cause total revenue to rise;would be _ __.;f. The portion;of the graph in which a decrease in price would not cause a change in total;revenue would be _ __.;g. The section;of the graph in which total revenue would be at a maximum would be ___.;h. The section;of the graph in which elasticity is greater than 1 is _ __.;i. The section;of the graph in which elasticity is equal to 1 is _ __.;j. The section of the;graph in which elasticity is less than 1 is _ __.;Usethegraphshownbelowtoanswerthequestionsthatfollow.;What;istheeffectofa$300priceceiling;onthismarket? Wouldthisbeabinding;priceceiling?What;istheeffecta$700priceflooronthismarket?Wouldthisbeabindingpricefloor?Whywouldpolicymakerschooseto imposeaprice;ceiling orpricefloorona;market?

 

Paper#56752 | Written in 18-Jul-2015

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