QUESTION ONE
A Fill in the missing amounts in the following table SHOW
YOUR WORK
Change in Price Change in Quantity Elasticity
Demand for the Apple
iWatch
Demand for roses on
Valentine's day
Demand for electronic
cigarettes
B Would you recommend that Apple raise or lower its prices
for the iWatch to increase revenues? Explain
C Would you recommend that florists raise their prices for
roses on Valentine's Day if their only goal is to increase
revenues? Explain
QUESTION THREE
Bisan is a fan of both movies and classical concerts. This
month she has $ to spend on the two activities. Let
represent movies and represent classical concert
A What is the price of a ticket to movies? Classical concert?
B If Bisan decides to spend all her money on movies, how
many movies can she afford?
C Assume that Bisan has some unexpected expenses one
month and can only spend $ that month. Draw her new
budget constraint
