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Microeconomics, 15/e
Campbell R. McConnell, University of Nebraska, Emeritus
Stanley L. Brue, Pacific Lutheran University
Chapter 7 Supply and Demand: Elasticities and Government Set Prices
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Web-Based Questions
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Web-Based Questions
- Web-Based Question: Kmart-determinants
of demand elasticities of "Blue Light Specials" Generally,
the elasticity of demand for a product will be greater (a) the larger the
number of substitutes, (b) the greater the proportion of income an item takes,
and (c) the less the item is considered to be a necessity. Kmart, at its website,
www.kmart.com, posts a weekly sales circular on selected merchandise,
organized by department. It must conclude that the demand for these "Blue
Light Specials" is elastic: The decrease in price will increase total
revenue. Check out this week’s specials and, for each item, score 1 point
for meeting the criterion of each determinant above. How many specials score
a 3? Do any score 0? Why would Kmart include any item that scored less than
a 3?
- Web-Based Question: New York apartments-rent
stabilization In New York City rent control was enacted during the
Second World War and then maintained afterward. Today, the control takes the
form of rent stabilization. Visit the websites of Tenant Net, at www.tenant.net,
and of the NYC Rent Guidelines Board, at www.housingnyc.com, to determine
how rent stabilization works. What would be the likely attitude of each of
the following groups toward the rent stabilization program: current landlords,
current renters, people looking for an apartment to rent in NYC?
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Interactive Graphs
Origin of the Idea
Analogies, Anecodotes, and Insights