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Question 1

Suppose that when the price of cereal increases from $3.8 to$4 quantity supplied increases from 220 to 240.

Using the mid-point elasticity approach, calculate price elasticity of supply.

Hint

Question 2

Suppose that when the price of peanut butter decreases from $4.1 to$3.8, quantity supplied decreases from 240 to 220.

Using the mid-point elasticity approach, calculate price elasticity of supply.

Hint

Question 3

Suppose that the price of cereal decreases from $4.4 to$3.9. As a result, quantity supplied decreases from 270 to 200.

Based on this information classify the supply curve.

Hint

Question 4

Consider the following supply schedule for jeans.

PriceQuantity Supplied
$4410$8418
$12426$16434
$20442$24450
$28458$32466

Suppose that the price of jeans increases from $12 to$16.

Using the mid-point approach, calculate price elasticity of supply.

Hint

Question 5

Consider the following supply schedule for bags.

PriceQuantity Supplied
$6410$12416
$18422$24428
$30434$36440
$42446$48452

Suppose that the price of bags increases from $42 to$48.

Using the mid-point approach, calculate price elasticity of supply.

Hint