Economics – 10/15/18

I  Bellwork:  On Google Classroom

II.  Objectives:

• Apply the total revenue test to determine demand elasticity
• Utilize the determinants of elasticity to form a judgement on the elasticity of an item

• Create a claim, evidence, and reasoning  on elasticity based upon information provided in an article

III.  Discussion

A.  Total Revenue Test – Brace Map in Notebook

1.  Fareed sells falafel sandwiches. He charges $4.00 a sandwich and usually sells 100 a day. He recently decided to increase the price of a sandwich to $4.80 and is currently selling 75 sandwiches a day. Use the total revenue test to determine if his falafel sandwiches are elastic or inelastic. Show your work.
2.  Based upon your answer, what market conditions may exist that would support your findings.

B.   Determinants of Elasticity (List) See Figure 4.6

1. –Can the purchase be delayed?
2. –Are adequate substitutes available?
3. –Does the purchase use a large portion of income?

IV.  Classwork:    Page 109 Q&A  2-6

V.   Chapter-4-Review–

VI Chapter 4 Test Wednesday

Economics F2018