Problem 1: If a price increase from $5 to $7 causes quantity demanded to fall from 250 to 100, what is the absolute value of the own-price elasticity at a price of $7?
A)1.75.
B) 5.25.
C) 0.19.
D) 2.15.
Problem 2: Mitchell's money income is $150, the price of X is $2, and the price of Y is $2. Given these prices and income, Mitchell buys 50 units of X and 25 units of Y. Call this combination of X and Y bundle J. At bundle J Mitchell's MRS is 2. Given these prices and income, what is Mitchell's equilibrium consumption of X?
A) X < 50.
B) X = 50.
C) X > 50.
D) X = Y.