1. Elasticity practice Price of eggs goes from $2 to $4, quantity demanded decreases from 5 to 4.

2. Price of eggs increases from $2 to $4 and quantity demanded decreases from 5 dozen to 4.

3. Elasticity Practice Price of a big bag of M&Ms increases from $4 to $5 and quantity demanded goes from 4 to 2

5. Calculate elasticity based on the graph below

7. Income Elasticity of Demand Inferior Goods- goods in which the demand moves opposite to income. Examples: ground beef, used cars

8. Cross-Price elasticity of Demand Measures the extent to which goods are substitutes or complements

9. Price Elasticity of Supply Measures how supply reacts to changes in price Supply tends to be inelastic in the short-run and elastic in the long-run

10. ASSIGNMENT Read ch. 5 Do “Tackle the Test” problem and check answer (on class web page) Do problems and applications pages 108-109 and check answers on class web page