Refer to the information provided in Figure 5.2 below to answer the questions that follow using both point and midpoint

| November 24, 2016

Question
AL AIN UNIVERSITY OF SCIENCE AND TECHNOLOGY

COLLEGE OF BUSINESS ADMINISTRATION

PRINCIPLES OF MICROECONOMICS

FALL 2015/2016

ASSIGNMENT 1 (DUE ON WEDNESDAY 21 OCTOBER 2015)

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1. Refer to the information provided in Figure 5.2 below to answer the questions that follow using both point and midpoint formulas..

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Figure 5.2

a. If the price of a hamburger is increased from $8 to $10, compute the price elasticity of demand.

b. If the price of a hamburger is increased from $6 to $8, compute the price elasticity of demand.

c. If the price of a hamburger is increased from $2 to $4, compute the price elasticity of demand

d. At Point Cthe price elasticity of demand is -1. Examine the elasticity of the demand curve along line segment EC.

2. Ahmad consumption from fish is 4 Kg per month when his income is AED 15,000. His consumption from fish rises to 6 Kg as his income rises to AED 18000. Compute the income elasticity for Ahmad’s demand.

3. If the cross-price elasticity of demand between fish and chicken is 2, find the percentage change in quantity of chicken if the price of fish is increased by 2.

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