1. Copyright ©2001, South-Western College Publishing Contemporary Economics: An Applications Approach By Robert J. Carbaugh 1st Edition Chapter 3: Demand and Supply Applications

2. Carbaugh, Chap. 3 2 Price elasticity of demand Elasticity of Demand elasticity coefficient itemshort runlong run Airline travel0.12.4 Medical care0.30.9 Natural gas1.42.1 Auto tires0.91.2 Stationery0.50.6 Gasoline0.20.7 Housing0.31.9 Automobiles1.92.2 Movies0.93.7 Jewelry & watches0.40.7 Radio & TV repair0.53.8 Foreign travel0.11.8 Glass, china, etc.1.52.5 Estimated price elasticities of demand

3. Carbaugh, Chap. 3 3 Elasticity and airline ticket tax Elasticity of Demand Price ($) S 1 (with tax) S 0 (without tax) D 1 (elastic) D 0 (inelastic) 520

4. Carbaugh, Chap. 3 4 Price elasticity of supply Elasticity of Supply Price elasticity Vegetableshort runlong run Lima beans0.101.70 Cabbage0.361.20 Carrots0.141.00 Cucumbers0.292.20 Onions0.341.00 Green peas0.314.40 Green peppers0.070.26 Tomatoes0.160.90 Cauliflower0.141.10 Celery0.140.95 Spinach0.204.70 Estimated price elasticities of supply

5. Carbaugh, Chap. 3 5 Rent ceilings and housing shortages Price Ceilings and Floors Rent ($) S0S0 D1D1 D0D0 Shortage Rent ceiling A C B

6. Carbaugh, Chap. 3 6 Usury ceilings and credit shortages Price Ceilings and Floors Interest rate S0S0 D1D1 D0D0 Shortage Interest ceiling A C B

7. Carbaugh, Chap. 3 7 Market for gasoline with a price ceiling Price Ceilings and Floors Price S0S0 S1S1 D0D0 Shortage Price ceiling A C B

8. Carbaugh, Chap. 3 8 Effect of price supports for wheat Price Ceilings and Floors Price S0S0 D0D0 Surplus Price floor A C B