Question

3.

.   Suppose that business travelers and vacationers have the following demand for airline tickets from Seattle to Washington, D.C.:

Price	Qty Demanded (# tickets) for business travelers	Qty Demanded (# tickets) for vacationers
$100	2,100	1,000
$150	2,000	800
$200	1,900	550
$250	1.800	400

As the price of tickets rises from $150 to $200, the price elasticity of demand for business travelers is __________.

2. Using the same data contained in #1, as the tickets rise from $150 to $200, the price elasticity of demand for vacationers is ____.

Suppose that your demand schedule for Harkin’s movie tickets is as contained in the following table.

Price	Qty Demanded (# tickets) when Income = $10,000	Qty Demanded (# tickets) when Income = $15,000
$8	50	60
$10	35	55
$12	30	40
$14	26	30
$16	18	22

a. A. Calculate price elasticity of demand as the price of tickets increases from $8 to $10 if (1) your income is $10,000, and (2) your income is $15,000

b. B. What is the income elasticity of demand if your income increases from $10,000 to $15,000 when the price is $14

Answer 1

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