1. Calculating Elasticity of Demand
Chapter 4 states price elasticity of demand is calculated by dividing the percentage change in quantity demanded by the percentage change in price. Go to the About Economics website at http://economics.about.com/cs/micfrohelp/a/priceelasticity.htm?terms=price+change, read the homepage, and calculate the point price elasticity using the data at the bottom of the page.

1. What is the point price elasticity when price increases from $7 to $8?
   
   
2. What is the point price elasticity when price increases from $8 to $9?
   
   
3. What other elasticities are mentioned on the website?
   
   

2. Cigarette Taxes and Demand Elasticity
Read "Taxation as a Tool to Discourage Smoking," by Timothy L. Grollmes, at http://www.unomaha.edu/~wwwpa/project/grollmes.html.

1. If the government wishes to discourage tobacco use by raising taxes, why is it important to know the price elasticity of demand?
   
   
2. According to this document, how does elasticity differ between youth and adults?
   
   
3. Explain why the price elasticity of demand differs between young people and adults.