University of the people

Learning Journal Unit1

Bus 1103: Microeconomics

Katarina Gajdsova (Instructor)

21th September, 2022

I. 1. Calculate the price elasticity of demand from point B to point C.

Price elasticity of demand = (percentage change in quantity demanded / percentage

change in price)

Percentage change in quantity demanded = (change in quantity demanded / average of the

two quantities demanded)

Percentage change in quantity demanded = (3500-2000) / ((3500+2000)/2) = 1500/2750

= 0.5455 = 54.55%

Percentage change in price = (change in price / average change in price)

= (30-20) / ((30+20)/2) = 10/25 = 0.4 = 40%

Therefore,

Price elasticity of demand = (54.55 / 40) = 1.36375

2. Classify the elasticity for point B to point C as elastic, inelastic, or unitary.

The price elasticity of demand is elastic because it is more than one.

3. Provide an explanation for the elasticity of point B to point C.

Price elasticity of demand, which we measure as being larger than 1, indicates

considerable responsiveness to price changes.

4. Calculate the price elasticity of demand from point D to point E.

Price elasticity of demand = (percentage change in quantity demanded / percentage

change in price)

Percentage change in quantity demanded = (change in quantity demanded / average of the

two quantities demanded)

Percentage change in quantity demanded = (1700-1800) / ((1700+1800)/2)

= -100/1750 = -0.05714 = -5.714%

Percentage change in price = (change in price / average change in price)

= (50-40) / ((50+40)/2) = 10/45 = 0.22 = 22.2%

Therefore,

Price elasticity of demand = (-5.714 / 22.2) = -0.257=-0.26

5. Classify the elasticity for point D to point E as elastic, inelastic, or unitary.

It’s inelastic.

6. Provide an explanation for the elasticity of point D to point E.

Demand is inelastic, which indicates that price moves more slowly than quantity because

the price elasticity of demand is less than 1.

7. Calculate the price elasticity of demand from point G to point H.

Price elasticity of demand = (percentage change in quantity demanded / percentage

change in price)

Percentage change in quantity demanded = (change in quantity demanded / average of the

two quantities demanded)

Percentage change in quantity demanded = (1600-2200) / ((1600+2200)/2) = -600/1900 =

-0.3158 = -31.58%

Percentage change in quantity demanded = (1600-2200) / ((1600+2200)/2) = -600/1900 =

-0.3158 = -31.58%

Therefore,

Price elasticity of demand = (-31.58 / 13.3) = -2.374 =-2.4

8. Classify the elasticity for point G to point H as elastic, inelastic, or unitary.

It’s Elastic.

9. Provide an explanation for the elasticity of point G to point H.

If we examine the price elasticity of demand, it is less than 1, yet the process is elastic

due to the great reactivity to price change. Athletic shoe demand declined to 31.58 when

the price increased by 13.33, hence we will classify the product as elastic rather than

inelastic.

10. Calculate the price elasticity of supply from point K to point L.

Price elasticity of supply = (percentage change in quantity supplied / percentage change

in price)

Percentage change in quantity supplied = (change in quantity supplied / average of the

two quantities supplied)

Percentage change in quantity supplied = (change in quantity supplied / average of the

two quantities supplied)

Percentage change in price = (change in price / average change in price)

= (8-4) / ((8+4)/2) = 4/6 = 0.6666 = 66.66%

Therefore,

Price elasticity of supply = (9.52 / 66.66) = 0.14

11. Classify the elasticity for point K to point L as elastic, inelastic, or unitary.

It’s Inelastic.

12. Provide an explanation for the elasticity of point K to point L.

It is inelastic because, as we can see, a 66.66 percent difference in price only resulted in a

9.52 percent change in the amount provided.

13. Calculate the price elasticity of supply from point N to point P.

Price elasticity of supply = (percentage change in quantity supplied / percentage change

in price)
Percentage change in quantity supplied = (change in quantity supplied / average of the

two quantities supplied)

Percentage change in quantity supplied = (change in quantity supplied / average of the

two quantities supplied)

Percentage change in price = (change in price / average change in price)

= (64-32) / ((64+32)/2) = 32/48 = 0.6666 = 66.66%

Therefore,

Price elasticity of supply = (66.66 / 66.66) = 1

14. Classify the elasticity for point N to point P as elastic, inelastic, or unitary.

It's unitary.

15. Provide an explanation for the elasticity of point N to point P.

It is unitary as we can see since the stated percentage change in price (66.66%) causes an

equivalent percentage change in supply (66.66%).

16. Calculate the price elasticity of supply from point Q to point R.

Price elasticity of supply = (percentage change in quantity supplied / percentage change

in price)

Percentage change in quantity supplied = (change in quantity supplied / average of the

two quantities supplied)

Percentage change in quantity supplied = (1400-1000) / ((1400+1000)/2) = 400/1200 =

0.3333 = 33.33%

Percentage change in price = (change in price / average change in price) = (256-128) /

((256+128)/2) = 128/192 = 0.6666 = 66.66%

Therefore,
Price elasticity of supply = (33.33/ 66.66) = 0.5

17. Classify the elasticity for point Q to point R as elastic, inelastic, or unitary.

It’s Inelastic.

18. Provide an explanation for the elasticity of point Q to point R.

It has poor responsiveness to changes in price, which is why I claimed it was inelastic, as

we can see that the percentage change in the price of 66.66 generated only a 33.33

percent change in the amount provided.

II. Questions

What did you like most about the Unit 3 learning journal?

Learning how to quantify one variable's sensitivity to changes in another variable is what

I like most about this chapter. Making all those percentage calculations and drawing

inferences based on the results is something else I love doing.

What did you least like about completing the Unit 3 learning journal?

Since those sections will be the ones I would not say I like the least, I will not lie and say

that I appreciate expressing my thoughts on what I like and do not like about this chapter.

However, I truly enjoyed doing the calculation in part I of the question.

What is the most interesting thing have you learned about Microeconomics since

beginning this course?

The notions concerning elasticity I learned this week were the fascinating things I have

learned so far. I found the second week's courses more challenging and struggled a little
 there. However, this week's classes on calculating percentage changes in price, demand,

supply, and price elasticity were fantastic, and I loved them.

Reference:

Greenlaw, S. A. &  Shapiro, D. (2018). Principles of microeconomics, 2e. Open Stax Rice

University. https://d3bxy9euw4e147.cloudfront.net/oscmprodcms/media/documents/

Microeconomics2e-OP.pdf