Suppose that you are a trustee of a major university. At a board of trustees mee

Question

Suppose that you are a trustee of a major university. At a board of trustees meeting a university official states that the demand for places at this university is completely inelastic. As evidence, he states that tuition has doubled in the last decade but that there has been no appreciable decrease in the number of students. Do you agree? Comment on the argument. b. In the early 1880's cigarette-rolling machinery became available. Prior to this all rolling was done by hand. The machines dramatically cut the cost of rolling cigarettes. But they were not fully automatic-they needed the permanent presence of an operator in order to work. Draw representative isoquants for cigarette-rolling before and after the introduction of the machines. What were the MRTS's in each case?

Explanation / Answer

First question is answered below.

No, the given statement is not agreeable upon. This is because the elasticity of demand for places at the university will be affected by the tuition fees, among other factors. If a change in tuition fees does not lead to a change in number of students, only then the demand can be said to be inelastic.

Tuitions are a complementary good to university education, and not substitute good. All students in university will generally enroll for tuitions. This will not affect the number of students in the university, and thus it has no connection will elasticity.

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.