The following assignment is divided into two sections.
Section 1: Application; Section 2: Comprehensive. The assignment must be submitted in ONE word document.
These two sections are separate and independent of each other. Although they are required to be included on the same Microsoft Word document, do not integrate these two sections together.
Section 1 Application is an essay while Section 2 Comprehensive contains terms which you are required to define, discuss and provide examples for. The terms have nothing to do with the essay! Total of 80 points for the entire assignment
Section 1 Application - 48 points total (500 words minimum; this does not include title information, references, or an abstract)
Address the following: Price elasticity of demand refers to the percentage change in demand resulting from a percentage change in price. Please review the definition of relative inelasticity and relative elasticity. These terms refer to how much demand changes based on a change in price.
- Choose any three products and classify and describe their price elasticity of demand; (relatively inelastic, relatively elastic, perfectly elastic, perfectly inelastic, or unitary elastic; your three products should illustrate different elasticities; ie: do not chose two relatively inelastic products)
- Discuss what happens to the demand when the price changes for each of your items, specifically how much does demand change when the price changes?
- Explain why demand changes the way it does for each of your three products
Section 2 Comprehension - 32 points total (4+4 points for each term)
Define and explain each of the terms and provide an example of each using a minimum of 50 words
Description of term (in your own words)
Integration of example (50 words minimum for each term)
1) Unitary Price Elasticity
2) Perfect Price Inelasticity (INELASTICITY!)
3) Cross Elasticity of Demand
4) Income Elasticity