The text tells us that there are long-run elasticities and short-run elasticities.
How long is the long run and how long is the short run?
What meaning do the elasticity measures have if you don't know those lengths? (Austrian)
In this chapter we learn that most new cars aren't sold at their list price but are sold at a discount and that this allows dealerships to charge more to customers with inelastic demand. At the same time, studies have shown that retail car dealerships systematically offer substantially better prices on identical cars to white men than they do to blacks or women. (Source: Ian Ayres, "Fair driving: Gender and race discrimination in retail car negotiations." Harvard Law Review 104 (1991): 817-72)
Why do you think this happens?
In this example, does the existence of price discrimination allow for racial or sexual discrimination? (Feminist)
Early economists made a distinction between needs and wants. Needs were economist's concern; wants were of far less importance.
Can such a distinction be made?
Would making such a distinction change the nature of economic analysis?
Does the fact that the book makes no distinction between luxuries and necessities other than in their elasticity of demand reflect a bias of economic analysis? (Christian)
In the chapter, you saw that an increase in Vermont's minimum wage stimulated a small quantity response.
What does this tell you about the nature of the labor market in Vermont? (Hint: think carefully and critically about the conditions shaping worker options and their responses to changes in wages.)
What policy implications does your answer to a suggest? (Institutionalist)
If elasticities are constantly changing as the time period gets longer, how do managers use a measure of elasticity of demand to determine the price they charge? If they don't use elasticities how do they set price? (Post-Keynesian)
Price elasticity is not just a technical economic concept. It also reflects the distribution of economic power—the bargaining power and economic opportunities of buyers and sellers.
When suppliers (for example, landlords or energy companies) hold disproportionate power over buyers, or consumers (for example, employers in low-wage labor markets) hold disproportionate power over sellers, what meaning do elasticities have?
Should anything be done about those inequities? (Radical)
