XECO 212 Week 2 Price Elasticity and Supply and Demand Short Answer Quiz

Complete the Price Elasticity and Supply and Demand Short Answer Quiz in Appendix B.

Post your completed chart as an attachment.

Click the Assignment Files tab to submit your assignment.

Appendix B

Price Elasticity and Supply & Demand

Fill in the matrix below and describe how changes in price or quantity of the goods and services affect either supply or demand and the equilibrium price. Use the graphs from your book as a tool to help you answer questions about the changes in price and quantity

Event	Market affected by event	Shift in supply, demand, or both. Explain your answer.	Change in equilibrium
Frozen orange crops in California	*Orange juice*	*Supply (left)—Not as many available oranges to offer consumers.*	*Price will increase and quantity will decrease.*
Hurricanes in the Gulf Coast
Cost of cotton decreases
Technology improves efficiency in pasta manufacturing

What do substitutes refer to in economics? Give an example of two substitutes.

Define “Price Elasticity of Demand.” Give an example.

Determine if the demand for the following products is price elastic or price inelastic, and explain your answer. In your explanation, be sure to include how the necessity of a good and the availability of substitutes affect the price elasticity of demand in each of these specific cases:

Gasoline as a commodity

Gasoline sold at a local gasoline station

Hotel rooms for people planning a vacation

Hotel rooms for people on business to meet an important client

Define the Law of Demand and the Law of Supply. Give an example for each.