tailieunhanh - Ebook Economics (8th edition): Part 2

(BQ) Part 2 book "Economics" has contents: Microeconomics microeconomic fundamentals, product markets and policies, factor markets and related isues, market failure and public choice, the global economy international economics and globalization, practical economics financial matters, web chapters web chapters. | chapter Elasticity Setting the Scene 17 George McClintock, 45 years old, lives in Bridgeport, Connecticut. He works for a pharmaceutical company. The following events happened one day in May. 8:04 . 3 : 3 3 P. M . 4 : 5 6 P. M . As he’s driving to work, George is listening to a news report on the reporter says that some group (George didn’t catch the name of the group) is urging people to trade in their SUVs for smaller group argues that smaller, more gas-efficient cars will reduce the amount of air pollution and make for a more healthful environment. George wonders if he should trade in his SUV and “do his part.” George is in a meeting that has been called to discuss the prices of the company’s new products. Some of his coworkers think the company should raise the price of one of its products by 5 percent; others are arguing against a price rise. One person at the meeting says,“How can we lose by raising the price? Currently, we sell 2,000 units a day at $40 a unit. If we raise the price $2, we can bring in $4,000 more every day.” Driving home after work, George is listening to a report on the radio about an earthquake in Los Angeles. In one area of LA, the earthquake destroyed many of the apartment news reporter says, “If anything, the earthquake will drive up the price of water and apartment rents.” ? Here are some questions to keep in mind as you read this chapter: © COMSTOCK IMAGES/JUPITER IMAGES • If everyone with an SUV trades it in for a smaller, more efficient car, will air pollution be reduced? • If the pharmaceutical company raises the price of one of its products by 5 percent, will its total revenue rise? • If the LA earthquake does result in higher apartment rents, does it follow that apartment landlords will have greater total revenue? See analyzing the scene at the end of this chapter for answers to these questions. 358 Part 6 Microeconomic Fundamentals How to Approach the Study of .