Re: Some microeconomics questions
From: smithaa02 (asdf_at_asdf.net)
Date: 09/28/04
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Date: Tue, 28 Sep 2004 18:53:29 -0500
There is no such thing as elastic demand in a market economy. Since the
opportunity cost of not partaking in a market economy is always greater then
trading with others, then one lacks the power to set equilibrium prices and
with it elastic supply and demand. You're teacher is a fraud.
Lara <zgall1@aol.com> wrote in message
news:8c43abae.0409281253.2a7d8eb7@posting.google.com...
> I am studying for a test and these questions are a part of my
> review booklet. I am having trouble with them and I would
> appreciate any help you could give me. Thanks.
>
>
> 1. True or false: Goods that are produced at a constant
> opportunity cost have an elastic demand
>
> 2. Drought in many wheat-growing areas cut the supply of
> wheat in 2004 by 4 percent. The price elasticity of demand for
> wheat is 0.5, and the cross elasticity of demand for pasta with
> respect to the price of wheat is 2.2.
> a. By how much will the price of wheat rise?
> b. By how much will the quantity demanded of pasta change?
> c. Pasta makers estimate that the change in the price of wheat
> in part (a) will increase the price of pasta by 20 percent. What is
> the pasta makers' estimate of the price elasticity of demand for
> pasta?
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