Five Brief Scenarios Are Presented Below

question 12

Essay

Five brief scenarios are presented below. Apply the correct elasticity term to each scenario and explain your answer.
(a) John must have an appendectomy. Upon arriving at the hospital he is told that for this week only they are doing abdominal operations at half price. Even in the face of a 50 percent price cut, John insists that he wants only one operation.
(b) Apple announces that it is willing to sell as many model 3000 computers as are ordered at a fixed price of $500 per unit.
(c) Northwest Airlines increased all its fares by 25 percent. As a result the number of passengers declined by 25 percent and the total revenue of Northwest Airlines remained the same.
(d) Newsweek magazine raised its price to annual subscribers by 50 percent. As a result annual subscriptions fell by 30 percent. Although it lost some readership, Newsweek significantly increased its revenues.
(e) The price of soybeans went up by 60 percent. In response farmers planted more soybeans and output increase by 70 percent.

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Definitions:

Hostage

A person seized or held as security for the fulfillment of a condition.

Revolutionary War

The conflict between the Thirteen American Colonies and British government between 1775 and 1783, which led to the colonies' independence as the United States of America.

Opening Battle

The first engagement or conflict in a war or series of battles, setting the tone and often influencing the course of the subsequent conflict.