Figure 5-8

-Refer to Figure 5-8.What is the slope and elasticity between point A and point B
A)The slope is equal to -1/4 and elasticity is equal to 2/3.
B)The slope is equal to -1/4 and elasticity is equal to 3/2.
C)The slope is equal to -3/2 and elasticity is equal to 1/4.
D)The slope is equal to -2/3 and elasticity is equal to 1/4.

Question

Figure 5-8
 
-Refer to Figure 5-8.What is the slope and elasticity between point A and point B
A)The slope is equal to -1/4 and elasticity is equal to 2/3. 
B)The slope is equal to -1/4 and elasticity is equal to 3/2. 
C)The slope is equal to -3/2 and elasticity is equal to 1/4. 
D)The slope is equal to -2/3 and elasticity is equal to 1/4.

Quizplus · Accepted Answer

The slope between point A and point B is equal to the change in quantity over change in price, which can be calculated as: 
(slope) = (Qb - Qa)/(Pb - Pa) = (20 - 25)/(-80 - (-100)) = -1/4 
The elasticity between point A and point B is equal to the percentage change in quantity over the percentage change in price, which can be calculated as: 
(elasticity) = [(Qb - Qa)/(Qa)] / [(Pb - Pa)/(Pa)] = [(20 - 25)/25] / [(-80 - (-100))/(-100)] = 3/2 
Therefore, choice B is correct as it gives the correct values for both slope and elasticity.

Figure 5-8 -Refer to Figure 5-8.What Is the Slope and Elasticity Between