Looking For Assistance With Microecon, Assume That Mimi
Looking For Assistance With Microecon Asapsuppose That Mimi Plays Gol
Looking for assistance with Microecon ASAP. Suppose that Mimi plays golf 5 times per month when the price is $40 and 4 times per month when the price is $50. What is the price elasticity of Mimi’s demand curve? Use the Midpoint Method to answer this problem. A) 1.0 B) 0.1 C) 0.8 D) 10.0
Youth smoking seems to be more ______ than adult smoking—that is, the quantity of youth smoking will fall by a greater percentage than the quantity of adult smoking in response to a given percentage increase in price. A) Elastic B) Inelastic C) Cross-price elastic D) Unitary elastic
When economists are sketching examples of demand and supply, it is common to sketch a demand or supply curve that is close to vertical, and then refer to that curve as _____ A) Elastic B) Inelastic C) Unitary elasticity D) Income elasticity
When economists are sketching examples of demand or supply that is close to horizontal, they refer to that demand or supply curve as _____ A) Having zero elasticity B) Inelastic C) elastic D) Price inelasticity
Paper For Above instruction
The assessment begins by calculating the price elasticity of demand for Mimi's golf playing frequency using the midpoint method. This measure quantifies how responsive her demand is to price changes. Subsequently, the discussion extends to the concept of elasticity as it relates to youth versus adult smoking, highlighting how the more significant percentage change in youth smoking demonstrates its greater elasticity compared to adult smoking. The paper further explores the typical graphical representations of demand and supply curves, identifying those that are close to vertical or horizontal as examples of inelastic and elastic behaviors, respectively.
Understanding Price Elasticity of Demand: The Case of Mimi
Price elasticity of demand (PED) measures how much the quantity demanded of a good responds to a change in its price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price. Using the midpoint method simplifies the calculation by averaging the initial and final quantities and prices, providing a more accurate measurement of elasticity for different price points.
Mimi's demand for golf can be evaluated between two points: at a $40 price, she plays 5 times a month, and at a $50 price, she plays 4 times. The percentage change in quantity demanded is calculated as:
Percentage change in quantity = (Q2 - Q1) / [(Q2 + Q1) / 2] = (4 - 5) / [(4 + 5) / 2] = -1 / 4.5 ≈ -0.2222
Similarly, the percentage change in price is:
Percentage change in price = (P2 - P1) / [(P2 + P1) / 2] = (50 - 40) / [(50 + 40) / 2] = 10 / 45 ≈ 0.2222
The price elasticity of demand (PED) is then:
PED = (% change in quantity demanded) / (% change in price) = -0.2222 / 0.2222 = -1.0
Since elasticity is typically expressed in absolute value, the PED for Mimi’s demand is 1.0, indicating unit elasticity. This suggests that a 1% increase in price leads to approximately a 1% decrease in quantity demanded.
Elasticity in Youth vs. Adult Smoking
When considering youth versus adult smoking, the greater responsiveness of youth smoking to price changes signifies higher elasticity. If the quantity of youth smoking decreases by a larger percentage in response to price increases compared to adults, this denotes that youth smoking is more elastic. This phenomenon could be attributed to factors such as peer influence, accessibility, and behavioral differences.
Higher elasticity of youth smoking implies that policies aimed at increasing tobacco prices through taxation may be more effective in discouraging youth smoking than adult smoking. Such elasticity demonstrates the sensitivity of youth smoking behavior to economic incentives, highlighting the importance of targeted interventions.
Demand and Supply Curve Shapes: Vertical and Horizontal Approximations
Graphical representations of demand and supply often utilize curves that are nearly vertical or nearly horizontal to illustrate prices or quantities that are insensitive or highly responsive to price changes, respectively. A demand or supply curve that is close to vertical signifies inelasticity, meaning that quantity demanded or supplied changes little regardless of price variations. For example, essential goods or goods with few substitutes often display this characteristic.
Conversely, a curve nearing horizontal indicates high elasticity, where a small change in price results in a significant change in quantity demanded or supplied. Such scenarios are common for goods with many substitutes or in competitive markets where consumers easily switch between alternatives.
Conclusion
The analysis of Mimi's demand elasticity elucidates the importance of quantifying responsiveness in consumer behavior. Recognizing the differences in elasticity between various groups, such as youth and adults, informs policies that aim to modify consumption patterns effectively. Additionally, understanding the graphical depiction of demand and supply helps clarify economic concepts and their practical applications in market analysis.
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