Question

1)Consider the following demand equation: Qd = 82 - 2P Using the point elasticity formula, find the price elasticity of demand at a price of P = 17. Your answer will likely be a decimal. Round it to the nearest 2 places. The price elasticity of demand is _____________ 2)The price of a case of macaroni from Costco is $10. At an old income of $200,000, Jaime’s yearly demand for macaroni was Qd = 45 – 2P At a new income of $150,000, Jaime’s yearly demand for macaroni is Qd = 50 – 2P Jaime’s income elasticity of demand for macaroni is __________. (Your answer may be a decimal. If so, round to the nearest tenth) 3)Lemmy is eating chocolate bars. The first bar gives him a marginal utility of 28 utils. The second bar gives him a marginal utility of 16 utils. His total utility after eating 3 bars was 49 utils. The marginal utility of the third chocolate bar was __________ utils. 4)See the cost table below. All missing blanks will be whole numbers. What number goes in the orange area 5)See the table below. Some of the MPL values are missing, and you'll have to fill in the MC column. Fill in the MC column when the wage is $30. L TP (Q) MPL MC 0 0 -- -- 1 5 5 2 15 10 3 30 15 4 40 5 45 6 49 7 51 What is the last number in the MC column?

Answer 1

1.

Differentiating above equation wrt P we get

When P = $ 17

Q = 82 - 2*17 = 82 - 34 = 48

The elasticity of demand can be determined using the following formula

Elasticity of demand = - 0.71

2. When income is $ 200,000, Q = 45 - 2P

Q = 45 - 2*10 = 25

When, I = $ 150,000, Q = 50 - 2P

Q = 30

Income Elasticity can be determined using the following formula

Income Elasticity, Ey = - 0.63 (Inferior good).

3. Marginal utility of 3rd bar = 49 - (28 + 16)

Marginal Utility of 3rd bar = 5 utils.

4. Table is missing.

5. Refer the attached picture below

Marginal cost is change in Total Cost upon change in quantity.

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