CHAPTER

5
N. .

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200
12
200 12

250
250

3




?
:

4


=

5


=

P

P
P2
10%
P1
15% D
= 1.5
10% Q
Q2 Q1
Q
15%
6


=

P

P2

P1

Q
Q2 Q1

7

%



P
x 100%

B
$250
A A B
$200

D
($250$200)/$200 = 25%
Q
8 12

8





P
A B,
B P 50/200 = 25%, Q
$250
A 4/12 = 33%,
$200 = 33/25 = 1.33
D
B A,
Q P 50/250 = 20%, Q
8 12
4/8 = 50%, = 5
0/20 = 2.50 9




x 100%


---

10


$250 $200
x 100% = 22.2%
$225

12 8
x 100% = 40.0%
10
:
40/22.2 = 1.8

11
 1

P = $70

Qd = 5000

P = $90

Qd = 3000

12
 1

(5000 3
000)/4000 = 50%

($90 $70)/$80 = 25%

50%
= 2.0
25%

13
 ?

:
20%
( )

14
 1
20%

15
 2
20%

16
 3
20%

17
 4
20%

18


19






.

20
 (
)
0%
= = =0
10%

P
D

P1

P2

Q
10% Q1
0
0%
21

5%
= = <1
10%
P

P1

P2
D
Q
10% Q1 Q2
<1
5
%
22


10%
= = =1
10%

P

P1

P2

D
Q
10% Q1 Q2
1
10
%
23

20%
= = >1
10%
P

P1
D
P2

Q
10% Q1 Q2
>1
2
0%
24
 (
)
%
=
= =
0%
P

P2 = P1 D

Q
0% Q1 Q2


%
25


P
$30 E =

20 E =

10 E =

$0 Q
0 20 40 60

26


P
200%
$30 E = = 5.0
40%
67%
20 E = = 1.0
67%
40%
10 E = = 0.2
200%

$0 Q
0 20 40 60

27



2.27

1.52

1.25

1.14


0.92

0.91

0.89
28



0.78

0.61

0.58
0.55

0.49
0.34

0.2

Sources: Ahson Mansur and John Whalley, Numerical Specification of Applied General Equilibrium Models: Estimation,
Calibration, and Data, in Scarf and Shoven, eds., Applied General Equilibrium Analysis (New York: Cambridge University
Press,1984), p. 109; Hendrik S. Houthakker and Lester D. Taylor, Consumer Demand in the United States: Analysis and
Projections (Cambridge: Harvard University Press, 1970).

29

$200 $2
50
= P x Q

30


=

= P x Q

> 1
>

31


( = 1.8) P


P = $200,

Q = 12 = $250
$2400
$200
P = $250, D
Q=8
= $2000
Q
8 12

32


=

= P x Q
< 1
<



$250
10 8

33



= 0.82 P
P = $200,

Q = 12
$250
= $2400
$200
P = $250,
Q = 10 D
= $2500
Q
10 12

34
 2
/
A. 10%

B. 20%

35
 2

A. 10%

= P x Q

10%

36
 2

B. 20%

= P x Q


20
%

37


38


39
 1:


S2
D1
S1
P2

P1

Q2 Q 1

40
 2:



. D2 D1
S


P1

P2


Q2 Q 1

41



=Q/P
(Q/Q)/
(P/P)=(Q/P)/(Q/P)

42


Total Revenue Percent

(Price x Percent Change Change
Price Quantity Quantity) in Price in Quantity Elasticity Description
$0 14 $0 200% 15% 0.1 Inelastic
1 12 12 67 18 0.3 Inelastic
2 10 20 40 22 0.6 Inelastic
3 8 24 29 29 1 Unit elastic
4 6 24 22 40 1.8 elastic
5 4 20 18 67 3.7 elastic
6 2 12 15 200 13 elastic
7 0 0

43


=

44

Price
elasticity
Percentage

change in Qs
==
of supply Percentage

change in P
P
S

P2
8%
P1
16%
= 2.0
8%
Q
Q1 Q2

16%
45






.

46

0%
= = =0
10%

P
S

P2

P1

Q
10% Q1
0

0%
47

5%
= = <1
10%

P
S

P2

P1

Q
10% Q1 Q2
<1
5
%
48

10%
= = =1
10%

P
S
P2

P1

Q
10% Q1 Q2
=1

10%
49

20%
= = >1
10%

P
S
P2

P1

Q
10 Q1 Q2
>1 %
2
0%
50
 ( )


= = % =
0%
P

P2 = P1 S

Q
Q1 Q2

51


52
 3

53
 3

D1 D2 S

P2 B

P1 A

Q
Q1 Q2
54
 3

D1 D2

B
P2
A
P1

Q
Q1 Q2
55


P

S
<

$15 1



12


>
1
4
$3
Q
100 200
500 525

56


> 0
< 0

57


0 1


1

58






80
90

59


1992 2003
52.9 37.1
14.1 9.8
8.4 6.3
2.5 7.3
2.6 11.1
8.8 14.4
6.0 10.7
4.7 3.3
100.0 100.0

60


1
=
2
> 0
(


< 0
(
61


- 2008 5 2

- 2008 7
8

- 2008 5 11

- 2008 5 2

- 2008 5 21

62


63


1.

S2

2. $3

0 100 110

3.
$300 $220

64


100 - 110
(100 110)/2
ED =
3.00 - 2.00
(3.00 2.00)/2

- 0.095
-0.24
0.4

65






1950 2004 70
2
1991
2004 10
60

66

70 OPEC

67

1

1
S2

S1

2 2
S2

P2
P2
S1
P1
P1

68


1 1

69


1
1

70


71