Transcript Do you plan to take any more economics courses at UCSB?

Do you plan to take any more
economics courses at UCSB?
72%
1. Yes
2. No
3. Undecided
de
d
o
13%
U
nd
ec
i
N
Ye
s
15%
If the price elasticity of demand
is 3, then the price elasticity of
supply must be –1/3.
81%
1. True
2. False
ls
e
ru
e
19%
Increasing the penalties for
selling cocaine is likely to
54%
1. Shift the demand curve
for cocaine up.
2. Shift the supply curve for
cocaine up.
3. Shift the supply curve for
cocaine down.
4. Shift the demand curve
for cocaine down.
37%
5%
de
m
an
d
cu
r..
..
cu
rv
e.
ly
Sh
ift
th
e
su
pp
th
e
Sh
ift
th
e
ift
Sh
Sh
ift
th
e
de
m
su
pp
ly
an
d
cu
cu
rv
e.
rv
.
..
..
4%
And on to our lecture…
The supply curve for marijuana is horizontal
and demand elasticity is –1/2. If the
government confiscates and burns 20% of the
marijuana crop, the equilibrium amount of
marijuana consumed will fall by
1. 40%.
2. 20%
3. 10%.
4. 5%
5. 0
46%
29%
15%
6%
3%
Price
Costs for producers increase
by about 20%.
Price increases by about 20%
% change in Quantity
% change in Price
=-1/2
%Change in Quantity= - 1/2*20= - 10
Quantity
Because of a new tax, the price of
cigarettes rises by 20 percent.
Consumption falls by 5 percent.
What is the price elasticity of demand?
1.
2.
3.
4.
5.
-5
-4
-1/4
-1/2
+4
86%
11%
0%
1%
2%
How will stiffer penalties for
drug dealers affect the amount of
money spent on drugs?
1. Decrease it if the demand curve
slopes down
2. Decrease it only if demand is
inelastic.
3. Increase it if demand is inelastic.
4. Increase it only if supply is
elastic.
61%
28%
d
to
nl
y
if
su
em
an
it
if
d
if
nl
y
it
o
it
i
ft
he
de
.
..
d.
..
..
pp
..
4% 7%
And back to our lecture…
What’s making all that noise?