Tarea: la elasticidad precio de la demanda

Problema 06:

a. For business travelers, the price elasticity of demand when the price of tickets rises from $200

to $250 is [(2,000 – 1,900)/1,950]/[(250 – 200)/225] = 0.05/0.22 = 0.23. For vacationers, the price

elasticity of demand when the price of tickets rises from $200 to $250 is [(800 – 600)/700] / [(250 –

200)/225] = 0.29/0.22 = 1.32.

b. The price elasticity of demand for vacationers is higher than the elasticity for business travelers

because vacationers can choose more easily a different mode of transportation (like driving or taking

the train). Business travelers are less likely to do so because time is more important to them and their

schedules are less adaptable.

Problema 07:

a. If Emily always spends one-third of her income on clothing, then her income elasticity of

demand is one, because maintaining her clothing expenditures as a constant fraction of her income

means the percentage change in her quantity of clothing must equal her percentage change in income.

b. Emily's price elasticity of clothing demand is also one, because every percentage point increase

in the price of clothing would lead her to reduce her quantity purchased by the same percentage.

c. Because Emily spends a smaller proportion of her income on clothing, then for any given price,

her quantity demanded will be lower. Thus, her demand curve has shifted to the left. Because she will

again spend a constant fraction of her income on clothing, her income and price elasticities of demand

remain one.Problema 08:

a. With a price elasticity of demand of 0.4, reducing the quantity demanded of cigarettes by 20%

requires a 50% increase in price, because 20/50 = 0.4. With the price of cigarettes currently $2, this

would require an increase in the price to $3.33 a pack using the midpoint method (note that ($3.33 –

$2)/$2.67 = .50).

b. The policy will have a larger effect five years from now than it does one year from now. The

elasticity is larger in the long run, because it may take some time for people to reduce their cigarette

usage.

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