Internet Exercises


1			Go to http://www.goldprices.com Price Elasticity and the Price of Gold. Go to the McConnell-Brue-Barbiero Web site (Chapter 4) to find the very latest price of gold. Compare that price to the price at the beginning of the day. What was the highest price during the last 12 months? The lowest price? Assume the price fluctuations observed resulted exclusively from changes in demand. Would the observed price changes have been greater or less if the gold supply had been elastic rather than inelastic? Explain.




2			Go to http://www.nber.org Elasticity of Demand – Alcohol. On the McConnell-Brue-Barbiero Web site (Chapter 4), select NBER Working Papers. In the Google search space, type "alcohol." Use the titles and summaries of the papers to answer the following questions relating to elasticity: a. Do the mentally ill have perfectly inelastic demands for cigarettes and alcohol? b. Does alcohol consumption increase in bad times? c. What is the effect of cigarette taxes (and smuggling) on the consumption of alcohol? What does that imply about the cross elasticity of demand between the two? d. Is binge drinking among college and university students sensitive to the price of alcohol?