BU 224 UNIT 5 ASSIGNMENT Unit 5Assignment: Elasticity of Demand and Consumer Surplus Name: Course Number and Section:AB224â€“0X Date: General Instructions for all Assignments 1. Unless specified differently by your course instructor, save this assignment template to your computer with the following file naming format: Course number_section number_Last_First_unit number 2. At the top of the template, insert the appropriate information: Your Name, Course Number and Section, and the Date 3. Insert your answers below, or in the appropriate space provided for in the question. Your answers should follow APA format with citations to your sources and, at the bottom of your last page, a list of references. Your answers should also be in Standard English with correct spelling, punctuation, grammar, and style (double spaced, in Times New Roman, 12â€“point, and black font). Respond to questions in a thorough manner, providing specific examples of concepts, topics, definitions, and other elements asked for in the questions. 4. Upload the completed Assignment to the appropriate Dropbox. 5. Any questions about the Assignment, or format questions, should be directed to your course instructor. Assignment In this Assignment, you will calculate the Price Elasticity of Demand, demonstrate a firm understanding of consumer choices based on differing marginal utilities, consumersurplus, and how the buying choice and amount of consumer surplus changes based on various pricing schemes. In this Assignment, you will be assessed on the following outcome: AB224-5:Demonstrate how the concept of utility affects purchasing decisions by individuals and consumer surplus. Questions 1. The accompanying table shows the price and monthlydemand for barrels of gosum berries in Gondwanaland. Price of gosum berries per barrel Native Demand for gosum berries per month $100 0 $90 100 $80 200 $70 300 $60 400 $50 500 $40 600 $30 700 $20 800 $10 900 $0 1000 a. Using the midpoint method (show your work), calculate the price elasticity of demand when the price of barrel of gosum berries rises from $10 to $20. What does this estimate imply about the price elasticity of demand of gosum berries? b. Using the midpoint method (show your work), calculate the price elasticity of demand when the price of barrel of gosum berries rises from $70 to $80. What does this estimate imply about the price elasticity of demand of gosum berries? c. Notice that the estimates from (a) and (b) above are different. Why do price elasticity of demand estimates change along the demand curve? 2. Matilda is downloading music and videos from an online site. She is currently buying three music downloads that cost $3 each and two video downloads that also cost $3 each. The table below indicates what she reports as the marginal utility of the last music download and of the last video download in this combination of purchases. Quantity Price per Download MU per download Music downloads 3 $3 60 Video downloads 2 $3 45 As an assignment for her Microeconomics course, Matilda used the marginal utilities that she gave to her 3rd music download and her 2nd video download to complete the Experiment Tally Sheet below. a. A consumer maximizes utility when the last dollar spent on any good generates the same satisfaction as the last dollar spent on every other good. Is Matilda maximizing her utility? Explain your answer. b. Should Matilda consume one more video download, to move her closer to her optimum utility?Explain your answer. c. Should Matilda consume one less music download and one more video download, to move her closer to her optimum utility?Explain your answer. d. Should Matilda consume one more music download, to move her closer to her optimum utility?Explain your answer. 3. Brandon and his family often rent movies from the new internet mov
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