CCC Harold ECON201 Module 2 & 3 Question Answers

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Module #2 Chapter 5, 6 & 19 1. Consider the following pairs of goods. For which of the two goods would you expect the demand to be more price elastic? Why? a. water or diamonds b. insulin or nasal decongestant spray c. food in general or breakfast cereal d. gasoline over the course of a week or gasoline over the course of a year e. personal computers or IBM personal computers e. What is the elasticity of demand between $5 and $2 in the children's market? Is this elastic or inelastic? f. Given the graphs and what your friend knows about economics, he recommends you increase the price of adult tickets to $8 each and lower the price of a child's ticket to $3. How much could you increase total revenue if you take his advice? 4 a. b. c. 1000 Using the graph shown, analyze the effect a $300 price ceiling would have on the market for ten-speed bicycles. Would this be a binding price ceiling? Using the graph shown, analyze the effect a $700 price floor would have on this market for ten-speed bicycles. Would this be a binding price floor? Why would policymakers choose to impose a price ceiling or price floor? price 900 S 800 700 600 500 400 300 200 D 100 1000 2000 3000 4000 5000 6000 7000 8000 quantity Module 3 Chap 0 & 19 #1. What components of GDP (if any) would each of the following transactions affect? Explain. a. A family buys a new refrigerator. b. Aunt Jane buys a new house. c. Ford sells a Mustang from its inventory. d. You buy a pizza. e. California repaves Highway 101. f. Your parents buy a bottle of French wine. g. Honda expands its factory in Marysville, Ohio. #2. In the economy of Wrexington in 2008, consumption was one-half of GDP, government purchases were $2000 more than investment, investment was one-sixth of GDP, and the value of imports exceeded the value of exports by $500. What was Wrexington’s GDP in 2008? ...
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Juniper
School: Carnegie Mellon University

Hello buddy, kindly find your paper attached below. Let me know what you think. Thank you

Module #2 Chapter 5, 6 & 19
1.

Consider the following pairs of goods. For which of the two goods would you expect the demand to
be more price elastic? Why?
a.

Water or diamonds- diamond would be more price elastic than water because it’s a luxury
good, and thus consumers can postpone its consumption to a later date in case of price
hike because it is not a necessity as water.

b.

insulin or nasal decongestant spray- nasal decongestant spray is more price elastic than
insulin because insulin unlike the nasal spray does not have substitute and the diabetic
patients entirely depend on it and thus making its demand less price elastic because they
have to buy it no matter the price.

c.

Food in general or breakfast cereal- breakfast cereal is more price elastic as compared to
food in general. This is because breakfast cereal has many substitutes than food in
general has.

d.

gasoline over the course of a week or gasoline over the course of a year-Gasoline over the
course of a year is more price elastic than over the course of a week due to the fact that
we do not budget for the course of the year but for short pe...

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Anonymous
awesome work thanks

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