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Microeconomics A Contemporary Introduction 11th Edition McEachern Solutions Manual 1
Microeconomics A Contemporary Introduction 11th Edition McEachern Solutions Manual 1
CHAPTER 5
ELASTICITY OF DEMAND AND SUPPLY
INTRODUCTION
The ability to calculate and comprehend the concept of elasticity is important to both businesses
engaged in price setting and government officials involved in policy making. This chapter focuses on
the price elasticity of demand, but supply elasticity, income elasticity, and cross-price elasticity of
demand are covered also.
CHAPTER OUTLINE
I. Price Elasticity of Demand
• A tool used to measure how responsive consumers are to price changes.
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56 Chapter 5 Elasticity of Demand and
Supply
D. Price Elasticity and the Linear Demand Curve: Price declines along a downward-
sloping linear demand curve cause total revenue to:
• Increase until the halfway point of the linear demand curve.
• Reach a maximum at the halfway point.
• Decrease below the halfway point of the demand curve.
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 Elasticity of Demand and Supply 57
A. Availability of Substitutes – The greater the availability of substitutes and the more
similar these substitutes are to the good in question, the greater that good’s price
elasticity of demand. The more narrow the definition of the good, the greater the
number of substitutes, thus the greater the elasticity.
B. Share of the Consumer’s Budget Spent on the Good – The more important the item
is as a share of the consumer’s budget, other things constant, the greater is the income
effect of a change in price, so the more price elastic is the demand for the item
D. Elasticity Estimates: ED is greater in the long run than in the short run
because consumers have more time to adjust to changes in price.
ES = {∆q/[(q+q')/2]} / {∆p/[(p+p')/2]}
Case Study: The Market for Food and “The Farm Problem”
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
58 Chapter 5 Elasticity of Demand and
Supply
V. Conclusion
The concept of elasticity is important to both businesses and government officials. Elasticity
measures the willingness and ability of buyers and sellers to alter their behavior in response to
changes in their economic circumstances. This chapter focuses on the price elasticity of
demand, but supply elasticity, income elasticity, and cross-price elasticity of demand are
covered also.
CHAPTER SUMMARY
The price elasticities of demand and supply show how responsive buyers and sellers are to changes in
the price of a good. More elastic means more responsive.
When the percentage change in quantity demanded exceeds the percentage change in price, demand is
price elastic. If demand is price elastic, a price increase reduces total revenue and a price decrease
increases total revenue. When the percentage change in quantity demanded is less than the percentage
change in price, demand is price inelastic. If demand is price inelastic, a higher price increases total
revenue, and a lower price reduces total revenue. When the percentage change in quantity demanded
equals the percentage change in price, demand is unit elastic; a price change does not affect total
revenue.
Along a straight-lined, downward-sloping demand curve, the elasticity of demand declines steadily as
the price falls. A constant-elasticity demand curve, on the other hand, has the same elasticity
everywhere.
Demand is more elastic (a) the greater the availability of substitutes, (b) the more narrowly the good
is defined, (c) the larger the share of the consumer’s budget spent on the good; and (d) the longer the
time period consumers have to adjust to a change in price.
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 5 Elasticity of Demand and Supply 59
The price elasticity of supply measures the responsiveness of quantity supplied to price changes. This
depends on how much the marginal cost of production changes as output changes. If marginal cost
rises sharply as output expands, quantity supplied is less responsive to price increases and is thus less
elastic. Also, the longer the time period producers have to adjust to price changes, the more elastic the
supply.
Income elasticity of demand measures the responsiveness of demand to changes in consumer income.
Income elasticity is positive for normal goods and negative for inferior goods. Normal goods subdivide
into necessities, which have an income elasticity of demand less than one, and luxuries, which have
an income elasticity of demand greater than one.
The cross-price elasticity of demand measures the impact of a change in the price of one good on the
demand for another good. Two goods are defined as substitutes, complements, or unrelated, depending
on whether their cross-price elasticity of demand is positive, negative, or zero, respectively.
TEACHING POINTS
1. After establishing how to calculate price elasticity of demand, it is easy to illustrate the relationship
between elasticity and total revenue. Try the following steps using a numerical example:
This exercise completes a circle of ideas. First was the relationship among the points on the
demand curve, price change, and total revenue. Next was the relationship between price-
induced changes in total revenue and elasticity. Therefore, a natural connection exists between
the points on the demand curve and the elasticity measure. Elasticity decreases as we move
down along the demand curve.
2. The elasticity formula is very useful. Consider a grocery store that sells, among other things,
peanut butter. One month it sets its price and observes its sales. The next month it raises the price
by 10 percent and observes the effect on total revenue. This is an experiment, and a very
inexpensive one. Cross-price elasticities with goods such as grape jelly are also easy to calculate.
3. Remind students that this chapter focuses on revenues only – costs are not yet considered. Thus,
maximizing total revenue by selling at the unitary elastic price will almost never be an optimum.
The unitary elasticity problem forms a good basis for a question for students to ponder.
4. Aside from the obvious need for business owners to understand elasticity in their revenue
calculations, knowledge of elasticities is important for policy makers as well. It is important to
carefully go through the examples of tax incidence and agricultural public policy. Problem 15 in
the text provides an interesting application of elasticity for policy.
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Title: Michelangelo
Language: English
Credits: Al Haines
MICHELANGELO
BY
EDWARD C. STRUTT
LONDON
GEORGE BELL & SONS
1908
TABLE OF CONTENTS
LIST OF ILLUSTRATIONS
CHRONOLOGY OF THE ARTIST'S LIFE
LIFE OF MICHELANGELO
OUR ILLUSTRATIONS
LIST OF ILLUSTRATIONS
It was in the gardens of the Medici at San Marco, where Lorenzo the
Magnificent had collected many antique statues and decorative
sculptures, that Michelangelo finally discovered his real artistic vocation,
and here he would spend many hours every day, assimilating the Hellenic
spirit which emanated from the masterpieces before him.
So much grief, says Condivi, did Michelangelo feel for his patron's
death, that for some time he was quite unable to work. He left the
Medicean palace, which had been his home during three years, and
returned to his father's house. But his love for art was stronger than his
grief, and after a few weeks, when he was himself again, he bought a
large piece of marble that had for many years been exposed to the wind
and rain, and carved a Hercules out of it. This statue was placed in the
Strozzi Palace, where it stood until the siege of Florence in 1530, when
Giovanni Battista della Palla bought it and sent it into France as a gift to
King Francis I. It has unfortunately been lost.
Piero de' Medici, the Magnifico's son and successor, had inherited
none of his father's brilliant qualities. He was proud and insolent, and his
coarse tastes and manners soon lost him that popularity which had been
Lorenzo's stepping-stone to greatness. Michelangelo, who had been his
companion as a boy, and whom he persuaded to accept his hospitality,
was ill at ease in the house of a Prince who could so far insult the
sensitive artist as to boast that he had two remarkable men in his
establishment, Michelangelo and a certain Spanish groom remarkable for
his athletic prowess, thus placing both on the same level.
In November of the preceding year Piero de' Medici had had to fly
from the city over whose destinies he was so unfit to preside, and when
Michelangelo returned to Florence he found that Savonarola had
established a popular government. The fiery Dominican, with his inspired
eloquence, his ascetic fervour and an energy bordering upon violence,
was exactly a man after Michelangelo's heart, and Savonarola's
impassioned and gloomy appeals made an indelible impression upon him.
The Last Judgment in the Sistine Chapel might almost be regarded as a
pictorial rendering of one of the terrible frate's sermons.
The statue was greatly admired in Rome and was the means of
bringing Michelangelo to the notice of the French king's envoy in Rome,
Cardinal De la Groslaye de Villiers, who commissioned him to carve a
marble group of Our Lady holding the dead Christ in her arms, for the
price of four hundred and fifty golden ducats. The contract, dated August
26th, 1498, is still preserved in the Archivio Buonarroti, and concludes
with these words: "And I, Jacopo Gallo, promise to his Most Reverend
Lordship that the said Michelangelo will furnish the said work within one
year, and that it shall be the most beautiful work in marble which Rome
to-day can show, and that no master of our days shall be able to produce a
better." We shall see, when describing this magnificent group, that
Jacopo's boast and promise were more than justified.
Benvenuto Cellini, who copied the cartoon in 1513, just before its
mysterious disappearance, describes it as follows: "Michelangelo
portrayed a number of foot soldiers who, the season being summer, had
gone to bathe in the Arno. He drew them at the moment the alarm is
sounded, and the men, all naked, rush to arms. So splendid is their action
that nothing survives of ancient or of modern art which touches the same
lofty point of excellence; and, as I have already said, the design of the
great Leonardo was itself most admirably beautiful. These two cartoons
stood, one in the Palace of the Medici, the other in the hall of the Pope.
So long as they remained intact they were the school of the world.
Though the divine Michelangelo in later life finished that great chapel of
Pope Julius, he never rose halfway to the same pitch of power; his genius
never afterwards attained to the force of those first studies."
After some months of hesitation, Julius II. finally decided upon the
best way of employing Michelangelo's talents. He resolved to have a
magnificent monument erected during his lifetime, and confided the task
to the young sculptor. In an incredibly short time Michelangelo prepared
his great design, which pleased the Pope so much that he at once sent him
to Carrara to quarry the necessary marble. During the eight months which
he spent at Carrara, Michelangelo blocked out two of the figures for the
tomb, so anxious was he to begin his colossal work.
It was thus that the gigantic work on which he had set his heart was
interrupted for the first time, and the curtain rose on the first act of that
"tragedy of the tomb," as Condivi appropriately calls it, by which the rest
of Michelangelo's life was darkened.
The artist obeyed, hoping that the Pope would allow him to go on with
the tomb, but, during his absence, Michelangelo's rivals had persuaded
Julius II. that it was unlucky to have a monument erected during his
lifetime, and that it would be much better to set Michelangelo to work on
the vault of the Sistine Chapel.
The result fully justified his confidence in his own powers. To attempt
an adequate description of the vault of the Sistine Chapel in this little
book would be a hopeless task. The stupendous frescoes which adorn it,
although described in hundreds of volumes, still afford material for much
original study and research, but we must here content ourselves with a
mere enumeration of the principal motives which go to make up this
grand pictorial symphony.
Michelangelo chose for his subject the Story of the Creation, the Fall
of Man, the Flood, and the Second Entry of Sin into the World, illustrated
by a series of nine compositions on the central space of the ceiling.
Twenty magnificent nude figures, representing Athletes, decorate the
corners of these central compositions, and support bronze medallions held
in place by oak garlands and draperies. The shape of the ceiling is what is
commonly called a barrel vaulting resting on lunettes, six to the length
and two to the width of the building. The second part of the decoration
demonstrates the need for a scheme of Salvation, promised by the
Prophets and Sibyls, whose majestic figures are painted alternately in the
triangular spaces between the lunettes, in the lower part of which is a
series of wonderful groups representing the ancestors of Christ.
It is not surprising that the artist should have wept tears of bitter
disappointment, for we learn from a letter to his brother Buonarroto,
dated June 15th, 1515, that at this time not only had he completed the
Moses and the Captives in marble, but the panels in relief were ready for
casting. Had he been left in peace, Michelangelo would certainly have
finished the monument to Pope Julius in its modified form in half the time
which he wasted quarrying marble from Carrara and Pietrasanta for the
façade of San Lorenzo. For over two years Michelangelo was engaged in
the tedious work of roadmaking and quarrying. In August, 1518, he
wrote: "I must be very patient until the mountains are tamed and the men
are mastered. Then we shall get on more quickly. But what I have
promised, that will I do by some means, and I will make the most
beautiful thing that has ever been done in Italy if God helps me."
Leo X.'s pontificate, which, although short, was one of the most
glorious and eventful in the history of art, came to an abrupt conclusion
on December 1st, 1521. By a strange irony of fate, the magnificent patron
of art and letters was succeeded by a pious and simple-minded Dutch
prelate, who regarded statues as pagan idols, and said that the Sistine
Chapel was "nothing but a room full of naked people." There is little
doubt that he secretly longed to have it whitewashed. Fortunately for art
and artists, his pontificate was of brief duration, and in 1523 Cardinal
Giulio de' Medici was elected in his stead, under the name of Clement
VII.