Chapter 5: Q.7 (page 130)
What would the gasoline price elasticity of supply mean to UPS or FedEx?
The percentage change in quantity delivered due to a given percentage change in gasoline price.
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What is the formula for the elasticity of savings with respect to interest rates?
Suppose you could buy shoes one at a time, rather than in pairs. What do you predict the cross-price elasticity for left shoes and right shoes would be?
When someone’s kidneys fail, the person needs to have medical treatment with a dialysis machine (unless or until they receive a kidney transplant) or they will die. Sketch a supply and demand diagram, paying attention to the appropriate elasticities, to illustrate that the supply of such dialysis machines will primarily determine the price
What is the formula for the cross-price elasticity of demand?
The federal government decides to require that automobile manufacturers install new anti-pollution equipment that costs $2,000 per car. Under what conditions can carmakers pass almost all of this cost along to car buyers? Under what conditions can carmakers pass very little of this cost along to car buyers?
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