Copyright ©2001, South-Western College Publishing Contemporary Economics: An Applications Approach By Robert J. Carbaugh 1st Edition Chapter 3: Demand and Supply Applications

Carbaugh, Chap. 3 2 Price elasticity of demand Elasticity of Demand elasticity coefficient itemshort runlong run Airline travel Medical care Natural gas Auto tires Stationery Gasoline Housing Automobiles Movies Jewelry & watches Radio & TV repair Foreign travel Glass, china, etc Estimated price elasticities of demand

Carbaugh, Chap. 3 3 Elasticity and airline ticket tax Elasticity of Demand Price ($) S 1 (with tax) S 0 (without tax) D 1 (elastic) D 0 (inelastic) 520

Carbaugh, Chap. 3 4 Price elasticity of supply Elasticity of Supply Price elasticity Vegetableshort runlong run Lima beans Cabbage Carrots Cucumbers Onions Green peas Green peppers Tomatoes Cauliflower Celery Spinach Estimated price elasticities of supply

Carbaugh, Chap. 3 5 Rent ceilings and housing shortages Price Ceilings and Floors Rent ($) S0S0 D1D1 D0D0 Shortage Rent ceiling A C B

Carbaugh, Chap. 3 6 Usury ceilings and credit shortages Price Ceilings and Floors Interest rate S0S0 D1D1 D0D0 Shortage Interest ceiling A C B

Carbaugh, Chap. 3 7 Market for gasoline with a price ceiling Price Ceilings and Floors Price S0S0 S1S1 D0D0 Shortage Price ceiling A C B

Carbaugh, Chap. 3 8 Effect of price supports for wheat Price Ceilings and Floors Price S0S0 D0D0 Surplus Price floor A C B