TABLE 1 PRICE ELASTICITY OF DEMAND FOR GOODS AND SERVICES Basket of goods and services Price elasticity of demand Basket 1 Airline travel Restaurant meals Fresh fish New cars Basket 2 Cigarettes Coffee Gasoline Electricity Source: The Economy Today (Schiller) a) i) c) ii) b) i) Define price elasticity of demand. ii) 432 2.4 NNN 2.3 2.2 1.2-1.5 4321 0.4 이이이이 0.3 0.2 0.1 Determine and explain the price elasticity of demand for goods and services in Basket 1 and Basket 2. Sketch the demand curve to show the elasticity of demand for goods and services in Basket 2 Discuss two (2) factors that influence its elasticity. Using a diagram explain the effect of a decrease in income on the market for new car.

TABLE 1 PRICE ELASTICITY OF DEMAND FOR GOODS AND SERVICES Basket of goods and services Price elasticity of demand Basket 1 Airline travel Restaurant meals Fresh fish New cars Basket 2 Cigarettes Coffee Gasoline Electricity Source: The Economy Today (Schiller) a) i) c) ii) b) i) Define price elasticity of demand. ii) 432 2.4 NNN 2.3 2.2 1.2-1.5 4321 0.4 이이이이 0.3 0.2 0.1 Determine and explain the price elasticity of demand for goods and services in Basket 1 and Basket 2. Sketch the demand curve to show the elasticity of demand for goods and services in Basket 2 Discuss two (2) factors that influence its elasticity. Using a diagram explain the effect of a decrease in income on the market for new car.

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 4.9P: (Other Elasticity Measures) Complete each of the following sentences: a. The income elasticity of...

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