Producer A: = and =
Producer B: = and =
Please use the information in the table to answer the following questions.
Country
Services
($trillion)
Manufacturing/Ag ($trillion)
A
12
6
B
10
4
Opportunity Cost A
Opportunity Cost B
Which has comparative advantage in services
Which has comparative advantage in manufacturing
.
Country
Agriculture
Tourism ($trillion)
C
6
10
D
8
2
Opportunity Cost C
Opportunity Cost D
Which has comparative advantage in agriculture
Which has comparative advantage in tourism
SHIFTS IN DEMAND
A miniature golf course owner has a location near LBCC. On a weekday during the school year, she observes that 100 players show up at a price of $15 each. On weekends, the demand increases by 50. During school break, only sell 50 show up. The owner tries Travelzoo coupons to boost sales. If she gives a 25% off coupon, sales increase by 25%. If she gives a 50% off coupon, she can boost sales by 50% over the base price.
• Copy the following chart to your workbook and fill in the numbers:
Quantity Sold
Selling Price
School Year Weekday
25% off coupon
50% off coupon
School Year Weekends
25% off coupon
50% off coupon
School Breaks
25% off coupon
50% off coupon
• Using one graph, graph the
• demand curve for school year weekdays.
• demand curve for school year weekends.
• demand curve for school breaks
• If the mini-golf course has a break-even point of $ 8.50, what is the greatest number of players they could expect (and not lose money)? (Use the existing prices. Do not extrapolate)
• A school year weekday
• A school year weekend
• A school break
• What kind of strategy would you recommend to the owner if the cost were $12 per player?
ELASTICITY
Percent change quantity = Q2 -Q1 / Q1 x 100
Percent change price = P2 -P1 / P1 x 100
= PED
• A 7-11 owner looks at her end-of-month sales. In June, the price of a Slurpee was $2.50 and the station sold 300 units. In July, the price spiked to $3.00 per Slurpee and the station sold 280 units.
• What is the price elasticity?
• Is the product elastic or inelastic?
• What characteristics do Slurpee have that makes the produce elastic/inelastic?
• A large realty company looks at sales by the agents. In June 2018, it sold 480 units at an average price of $420,000. Following an interest rate hike by the FED, it finds sales in October were 435 units at $450,000
• What is the price elasticity?
• Is the product elastic or inelastic?
• What characteristics does this housing market have that makes it elastic/inelastic?
• The Trader Joes store in Long Beach in an average month sells 1200 cases of “Two Buck Chuck” at $3.00 per bottle. It holds a sale at $2.50/pound and find that it sells 1320 cases.
• What is the price elasticity?
• Is the product elastic or inelastic?
• What characteristics does Two Buck Chuck have that makes it elastic/inelastic? (Hint it is the cheapest wine at Trader Joe’s)
