Principles of Microeconomics 7th Edition solutions

Principles of Microeconomics 7
For each of the following pairs of goods, which good would you expect to have more elastic demand and why a.required textbooks or mystery novelsb.Beethoven recordings or classical music recordings in generalc.subway rides during the next six months or sub-way rides during the next five yearsd.root be

Principles of Microeconomics 7
Suppose that business travelers and vacationers have the following demand for airline tickets from New York to Boston:PriceQuantity Demanded (business travelers)Quantity Demanded (vacationers)$150 2,100 tickets 1,000 tickets200 2,000800250 1,900600300

Principles of Microeconomics 7
Suppose the price elasticity of demand for heating oil is 0.2 in the short run and 0.7 in the long run. a.If the price of heating oil rises from $1.80 to $2.20 per gallon, what happens to the quantity of heating oil demanded in the short run? In the long run? (Use the midpoint method in your calcula

Principles of Microeconomics 7
A price change causes the quantity demanded of a good to decrease by 30 percent, while the total revenue of that good increases by 15 percent. Is the demand curve elastic or inelastic? Explain

Principles of Microeconomics 7
Cups of coffee and donuts are complements. Both have inelastic demand. A hurricane destroys half the coffee bean crop. Use appropriately labeled diagrams to answer the following questions.a.What happens to the price of coffee beans?b.What happens to the price of a cup of coffee? What happens to tota

Principles of Microeconomics 7
Suppose that your demand schedule for DVDs is as follows:PriceQuantity Demanded (income = $10,000)Quantity Demanded (income = $12,000)$840 DVDs50 DVDs10324512243014162016812a.Use the midpoint method to calculate your price elasticity of demand as the price of DVDs increases from $8 to $10 if (i) your

Principles of Microeconomics 7
Maria has decided always to spend one-third of her income on clothing. a.What is her income elasticity of clothing demand? b.What is her price elasticity of clothing demand?c.If Marias tastes change and she decides to spend only one-fourth of her income on clothing, how does her demand curve change?

Principles of Microeconomics 7
The New York Times reported (Feb.17, 1996) that subway ridership declined after a fare increase: There were nearly 4 million fewer riders in December 1995, the first full month after the price of a token increased 25 cents to $1.50, than in the previous December, a 4.3 percent decline. a.Use these da

Principles of Microeconomics 7
Two driversWalt and Jessieeach drive up to a gas station. Before looking at the price, each places an or-der. Walt says, Id like 10 gallons of gas. Jessie says, Id like $10 worth of gas. What is each drivers price elasticity of demand?

Principles of Microeconomics 7
Consider public policy aimed at smoking. a.Studies indicate that the price elasticity of demand for cigarettes is about 0.4. If a pack of cigarettes cur-rently costs $2 and the government wants to reduce smoking by 20 percent, by how much should it increase the price b.If the government permanently i

Principles of Microeconomics 7
You are the curator of a museum. The museum is run-ning short of funds, so you decide to increase revenue. Should you increase or decrease the price of admis-sion? Explain

Principles of Microeconomics 7
Explain why the following might be true: A drought around the world raises the total revenue that farm-ers receive from the sale of grain, but a drought only in Kansas reduces the total revenue that Kansas farmers receive