Sadas

1-) Aprice change cause the quantity demand ................?

it is inelastic.  The fact that a decrease in quantity demanded means that more than likely the price went up, because in a demand curve: QD increases as P decreases and QD decreases as P increases.  This assumed increase of price paired with the increase of total revenue leads...

2-)You have the following information about good X and goodY…..?

An increase in income of 1% will lead to a 3% decrease in demand for X.

An increase in price of X of 1%,will lead to a 2% increase in demand for Y because X and Y are substitute. Demand for X must decrease, to buy more Y.

3-) Suppose the elasticity of demand for heating oil……?

a-)

%ΔP = (2.20 – 1.80)/1.80 * 100 = -0.40/1.80 * 100 = 22.22%

Short run: -0.2 =% ΔQ/22.22% → % ΔQ =- 4.44%

Long run: ΔQ% = -0.7 * 22.2% = -15.6%

b-)……………………..

4-) Suppose that your demand schedule for compact……?

a)

- {(40-32)/36} / {(8-10)/9} = {2/9 }/{2/9} = 1

* {(50-45)/47.5} / {(8-10)/9} = 10.5% / 22.2% = 0.47

b-)

* { (30-24)/27 } / { (10-12)/11 } = 22.2% / 18.2% = 1.22

* { (12-8)/10 } / { (10-12)/11 } = 40% / 18.2% = 2.2

5-)Suppose that business travelers vocationers…….?

a-)Formula is [(Q1-Q0)/1/2(Q1+Q0)]/[(P1-P0)/1/2(P1+P0)]

So for business travelers we have

(1,900-2,000)/1/2(1,900+2,000)/(250-200)/1/2(250+200)

-0.0512820/0.2222222= -0.2308

For vacationers it is

(600-800)/1/2(600+800)/ (250-200)/1/2(250+200)

-0.285714/0.222222= -1.2857

b-)………………………..

6-) Two drivers-Tom and Jerry- each drive up…….?

Tom has relatively inelastic demand for petrol - he doesn't cares about price but rather quantity - thus he is less sensitive to price changes.

Jerry has relatively elastic demand for petrol - he cares more about price rather than quantity - thus he is more sensitive to price changes.