Sp 21..Takehome#3 Ed. Part I Graphs_short answers .pdf
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ECON 101 XXXXXXXXXXTAKE- HOME QUIZ #3 : ELASTICITY
This is PART I : SHORT ANSWERS, PROBLEMS AND GRAPH
• Use space provided Add page if needed , but label question number clearly.
• Keep copy handy for when we review in class. Since this so close to the Midterm and I will not
have the chance to grade and return before , this will be the basis for our review in class. Become
aware of your strengths and weaknesses.
.
Due Thursday 3/25/21 9 am
- 11 points 4 pts for on –time submission and if all questions answered. (1 point deducted for
XXXXXXXXXXeach minimally answered or blank question)
XXXXXXXXXX7 pts based on the accuracy of selected questions I will choose (7-6 Excellent)
XXXXXXXXXX5-4 Satisfactory) (3-2 Needs Improvement) (1 No Pass)
- Evaluated also on effort towards your participation grade (as E/S/NS ) Effort means good detail
in explanations. This is still part of the learning process so a student may get an A even if there
are few e
ors. So be sure to give it a serious try. Partial credit given.
- Print the pdf, write your answers and upload file to Canvas in “Assignments’ that will be created
for this part.
Part II – Essay - 10 points ( A separate assignment will be created and posted in the module for this
part ) To be submitted electronically on Canvas by Friday 3/26/21 by 11:30 pm-
PART I : PROBLEMS Show method/ all work and explanations in the spaces provided.
1. (BusinessWeek Bloomberg). Chinese purchased 9.315 million locally made small passenger cars in
2012 when the price of the average car (Chinese Yuan) was the dollar equivalent of $17,700. Since
then, car sales outlets have been slashing prices. In August 2010 Chinese purchased 13.6 million cars
at average prices of Yuan equivalents of $16, XXXXXXXXXXBased on the calculations shown the price
elasticity of demand for cars in China is ____________ (elastic ; inelastic) . When commenting on
market outcomes an analyst in Beijing would have made this statement ,” automakers and dealers in
China are expected to be ____________ ( worse off ; better off .) To confirm show method and
calculations for the Ed.
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2 (a) If the a bottler named Carvallo in the Mexican Coke article had marked up the retail price of
Mexican Coke by 67% and the elasticity of demand were 0.3 then we can predict that the quantity
of Mexican Coke should have ______ ( increased ;decreased ) by _________ Show method here:
(b) For the pairs of goods below which good in the pair has the lower price elasticity of demand.
Explain your answer in the space provided.
XXXXXXXXXXSta
ucks; coffee as a drink
(c )Tue or False? The government wants to raise tariffs on foreign cars that are gas guzzlers to
discourage people from buying them because they are bad for the environment Then such cars are
considered inferior. ______ explain
iefly
d). An article in the Journal of New York State Economic Association claims that the income elasticity of
demand for public college education in New York is XXXXXXXXXXWho would find this information useful and most
importantly WHY? Come up with 3 or more interested parties- keep in mind students are not one of them
because they are the ones reacting. You MUST give a
ief explanation for each to make connection clear.
i).
ii).
iii).
d) The economic journal ‘Advanced Econometrics Supplement’ reported the estimates of income
elasticities of demand for food for the countries listed below They are not listed in order. Match the
country with the ‘most likely’ income elasticity value and write the value beside the country. make sure
you at least try solving this puzzle. Be guided by what we learned to solve this puzzle.
0.14 XXXXXXXXXXUnited States ______
0.76 XXXXXXXXXXCanada ____
0.15 XXXXXXXXXXFrance_____
XXXXXXXXXXChina_____
0.25 XXXXXXXXXXIndia _____
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3. In the article on Mexican Coke, it says that the Coca Cola Company had fined Arca $500 like a penalty
for selling Mexican coke. If so, and based on our lectures, who will end up paying the bigger burden of this
penalty? Arca or its buyers? Use words and a graph to
iefly explain/
4. For each of the following, state if the reaction is Elastic? Inelastic? Unitary elastic? Perfectly elastic?
Perfectly inelastic? Support your answer as instructed and remember : Be guided by theory .
a. WSJ Jan 2021 “Consumers in the US reached for pricier liquor as they looked to replicate a bar
experience at home . They also noted a continued shift from beer and wine to spirits “
XXXXXXXXXXYou would expect the price elasticity of demand for spirits to be _______________ and would
XXXXXXXXXXexpect the cross price elasticity with beer to become more _________________.
. Aug 2020. Uber is cutting the fares in major American cities given the Corona crisis. The reason
Uber gave : “. We lowered the prices to get more people to use Uber . This is angering some
drivers , however. One driver complained that the amount of money he earned did not change.
Reaction is ______________________________ Explain with a graph.
c. This question deals with elasticity of supply.
XXXXXXXXXXThe price of a kilowatt of electricity is the same during periods of high electricity demand as during
XXXXXXXXXXlow electricity of demand. “If so, supply is ______________________ elastic. Show graphically
XXXXXXXXXXwhat is happening
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5 . Read the short article on page 12 of your packet entitled “What’s In Fashion This Fall “. It is about
events/strategies involving the store, Banana Republic. Consider it as an application of the lectures so
far: Answer graphically. Using supply and demand suggest a graph that can represent the reactions
strategies described by the events. You MUST EXPLAIN any changes you show Explanation evaluated
as well.
PART II ESSAY/ Discussion
See separate pdf in module. Also separate Assignment will be created for submission.