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AP Microeconomics Assignment: Apply Concepts of All Elasticities Page 1 of 2 1. Elasticity A. Define price elasticity of demand. (5 points) B. Define…

I really need help on this entire assignment. This is due soon. help asap

ATTACHMENT PREVIEW

AP Microeconomics
Page 1 of 2
Assignment: Apply Concepts of All Elasticities
1.
Elasticity
A. Define price elasticity of demand.
(5 points)
B. Define price elasticity of supply.
(5 points)
C. Define income elasticity of demand.
(5 points)
D. Define cross price elasticity of demand.
(5 points)
2.
Price Elasticity of Demand
A. If demand is elastic, total revenue falls when ___________.
(2 points)
B. If demand is inelastic, is the demand curve flat
or steep
?
(2 points)
C. If demand is inelastic, the numerical value of elasticity is __________.
(2 points)
D. If demand is elastic, are there many
or few
substitutes available for the good?
(2 points)
E. If demand is elastic, do consumers have little
or lots
of time to respond to a
price change?
(2 points)
F. If demand is inelastic, is the money consumers spend on the good a large
or
small
part of their monthly budget?
(2 points)
3.
Price Elasticity of Supply
A. If supply is elastic, is the supply curve flat
or steep?
(2 points)
B. If supply is inelastic, do suppliers have little
or lots
of time to respond to a
price change?
(2 points)
C. If supply is inelastic, are the production inputs easy
or difficult
to use in
production of other goods?
(2 points)
D. If supply is elastic, the numerical value of elasticity is __________.
(2 points)
4.
It may be helpful to use graphs to answer the following questions. You won’t be graded
on your graphs, however.
A. If the price of watermelons fell only a little bit when the supply of watermelons
increased a lot, what could you conclude about the elasticity of demand for
watermelons?
(4 points)
B. If the price of bottled water increased a lot when the demand for bottled water
increased a little bit, what could you conclude about the elasticity of supply of
bottled water?
(4 points)

AP Microeconomics
Page 2 of 2
Assignment: Apply Concepts of All Elasticities
5. When you find cross-price elasticity of demand, you can determine whether the
goods are substitutes or complements based on whether your answer is a
positive or negative number. Explain. Include definitions of substitutes and
complements in your explanation.
(6 points)
6. When you find income elasticity of demand, you can determine whether the
goods are normal or inferior based on whether your answer is a positive or
negative number. Explain. Include definitions of inferior and normal goods in