AP Economics – 9/27/19

I.  Bellwork

A.  Summarize the article below

B.   Explain why is this happening, what are the options for the consumers and how they are impacted . How does this relate to elasticity/inelasticity.?

II.  Objectives:

  • Determine the central ideas and summarize concepts by paraphrasing them in relation to elasticity
  • Analyze, interpret and construct economic models to determine demand elasticity
  • Integrate and evaluate  information presented in order to determine demand elasticity from utilization of demand elasticity tests.

III.   Discussion  Pages 458-464

A  Demand Elasticity & Inelasticity – Elasticity of Demand

B.  Calculating Price Elasticity of Demand

  • %Change in Qd / %Change in P
  • Midpoint Method:

Worksheet 46.4: Elasticity of Demand Calculation

Practice: The price of college tuition increased from $20,000 to $22,000 per year. Enrollment by first year students declined from 500 to 400.

C. Total Revenue Method

D. Determinants

  • Substitutes
  • Proportion of Income
  • Luxury or necessity
  • Addictive
  • Time

IV.   Classwork

  • P465 Check Your Understanding #2
  • P465 1-5 Letter and Answer

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