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Name___________________________________ Date_____________ Class______________
ACTIVITY 4
MATHEMATICS
FOR
ECONOMICS ACTIVITY
Comparing Slope and Elasticity
Elasticity in supply and demand curves provides an excellent example of the mathematical concept of slope. The slope of a line or a part of a curve is defined as follows:
Slope =
rise
or
run
iivertical changee
horizontal change
A steep slope indicates a large amount of vertical change while a relatively flat slope
reflects very little vertical change. Examine the supply and demand curves below.
Demand Curve
$6.00
$6.00
$5.00
$5.00
$4.00
$4.00
Price
Price
Supply Curve
$3.00
$3.00
$2.00
$2.00
$1.00
$1.00
$0.00
$0.00
100
200
300
400
Quantity Supplied
100
200
300
Quantity Demanded
The flatness of the demand curve indicates an elastic demand. The small amount of vertical change shows that even a small change in price significantly changes the quantity
demanded for this product.
MATHEMATICS
FOR
ECONOMICS ACTIVITIES
Copyright © by Holt, Rinehart and Winston. All rights reserved.
The steepness of the supply curve indicates an inelastic supply. The large amount of
vertical change shows a large change in price, but the quantity supplied changes little.
6
400
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Activity 4, Continued
Now use the graphs below to answer the questions that follow.
Graph A
Graph B
Graph C
Graph D
1. Which graphs have curves with consistently steep slopes? ____________________________________
2. Which graphs are probably supply curves? Why?
__________________________________________________________________________________
__________________________________________________________________________________
3. Which graph shows an inelastic demand curve? Why?
__________________________________________________________________________________
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4. Which graph shows a demand curve with varying slopes? ____________________________________
Copyright © by Holt, Rinehart and Winston. All rights reserved.
5. Which graph shows an elastic supply curve? Why?
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__________________________________________________________________________________
MATHEMATICS
FOR
ECONOMICS ACTIVITIES
7
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ANSWER KEY
MATHEMATICS
ACTIVITY 1
1. The chart shows the production possibilities
for sound systems.
2. As the production of CD players increases, the
production of car stereos decreases.
3. 300,000 CD players
4. 150,000 car stereos
5. The company could make 250,000 of each
type of sound system, but it would not be maximizing its production possibilities. The company may choose to do this if demand for these
products is low.
6. The point that represents 400,000 of each
sound system is outside the production possibilities curve, so the company could not produce those amounts of both systems.
7. Answers may vary. The combination of CD
players and stereos should add up to about
750,000.
ACTIVITY 2
1.
2.
3.
4.
5.
6.
350
$875
$2.25
500
$1,125
$2.00
600
$1,200
$1.75
650
$1,137.50
$1.50
700
$1,050
ACTIVITY 5
1.
Demand Revenue
Profit
600
$3,000
$2,050
$950
$6
450
$2,700
$1,600 $1,100
$7.50
250
$1,875
$1,000
$875
ACTIVITY 6
1.
2.
3.
4.
1.
2.
3.
4.
5.
6.
ACTIVITY 4
1. Graph A and Graph C
2. Graph A and Graph D. These curves slope
upwards—quantity supplied tends to increase
as price rises.
3. Graph C. The curve slopes steeply downward—this shows a large change in price but
little change in quantity demanded.
4. Graph B
ANSWER KEY: MATHEMATICS
Costs
$5
15 percent
20 percent
37.5 percent
12 percent
$3,600
$1,200
$300
$13,750
$182.81
$4,160
$1,012.50
$1,487.50
ACTIVITY 8
2. $1.50 to $2.00
3. $2.00 to $2.50
4. $2.00
24
Price
2. $6
3. Answers may vary. Since profit appears to
decrease in both directions from $6, prices less
than $5 or higher than $7.50 probably would
not yield more profits.
1.
2.
3.
4.
5.
6.
7.
8.
Total
Revenue
$2.50
5. Graph D. The small amount of vertical change
shows that even a small change in price significantly changes the quantity demanded.
FOR
7.
8.
$10,300
$7.50
$17,000
Job Y pays $25,000 a year compared to
$24,000 a year for Job X.
$18,000
At Job A, she would make $13,800 a year. At
Job B, she would make $13,500, so Job A has
the better rate of pay.
$50 an hour
Teri; she earns $16,500 in the year while Terry
makes $16,000
CHAPTER 9
1. $8,447.39
2. $12,965.83
ECONOMICS ACTIVITIES
Copyright © by Holt, Rinehart and Winston. All rights reserved.
Price per Quantity
Unit
Demanded
ECONOMICS ACTIVITIES
ACTIVITY 7
a. 0.45 b. 0.125 c. 1.15
$5.76
$34.75
$4.80
$122.50
a. $51.75 b. $55.89
ACTIVITY 3
1.
FOR