Question 1: Own Price elasticity. Given the data to the right, compute the POINT elasticity of demand of a good as its price goes from $1.00 to $1.50. Show formula and work.
Price Quantity
1.00 10
1.50 9
Is the demand for this good in this range elastic or inelastic?
Question 2: If the wage bill per unit of labor (L) is $30 and the cost of capital (K) is $200 in the short run, fill in the BLANKS in the table below.
L Q TVC MPL APL AVC TFC TC ATC MC
0 0 200
1 4 200
2 10 200