Economics Homework Help

1. Choose two of these situations and explain whether it would be beneficial to a) raise prices or b) lower prices for this good or service in order to increase the producer’s revenue. Explain your prediction with reference to price elasticity of demand.

a. new mattresses

b. fees at a community college

c. fresh peaches at the public market

d. dental services

e. backstage pass to a music concert

f. a print copy of the textbook for this course

2. Go back to the warmup for this module. Select two items from each of the three sections. Explain why the correct answer is correct.

3. For the assignment, you analyzed the heroin market. This time I’d like you to analyze the marijuana market. In this case the price elasticity of demand is 1.5. Again, there is a market that clears with flexible prices, so we can use the supply/demand model. What do you expect to occur in this market when marijuana is legalized? No need to do additional research. Please just use your understanding of markets and elasticity to make a prediction about price and quantity. Please explain you prediction. No need to draw the diagrams, but you may refer to it in words.

4. Given the following bids to buy used textbooks to a market, calculate the price elasticity of demand between prices $15 and $25. Please show your work

Each of the following is the minimum price a buyer is wiling to pay for the book.

$15 $15 $15 $20 $20 $20 $25 $25 $25 $25

5. Using the concept of elasticity, explain why higher cigarette taxes are more likely to decrease smoking by teenagers than older adults.