Demand Elasticity

Please answer the following questions:

1.Given two parallel, downward- sloping, linear demand curves, is the demand elasticity the same at any given price? Given two downward- sloping, linear demand curves, with one showing consumption to be 50 percent greater than the other demand curve at each price, is the demand elasticity the same at any given price?

2. A few years ago, the bidding for a human kidney offered on the internet auction site Ebay hit $5.7 million before the company put a stop to it citing a federal law that makes it illegal to sell one’s own organs. Using a supply and demand graph, explain this bidding phenomenon given that the federal law mandates a price of zero for the sale of the body organs.

3. Some opponents of the death penalty are opposed to executing individuals who have been convicted of murder because they believe that murder is an irrational act and that raising the price of murder through capital punishment thus will not have a deterrent effect on prospective murders. If these opponents are correct in their view of murder being an irrational act, depict what the demand curve for murders look like. What is the price elasticity of demand for murder according to this view?

4. In an antitrust case brought by the justice department against microsoft, explain why the cross price elasticity of demand between rival operating systems such as Linux and microsoft’s own MS-DOS system might have been of interest in determining microsoft’s ability to control the prevailing price in the operating system market.

5. If a cable operator estimates basic tier demand elasticity to equal unity, will profit be increased by raising rates? Explain. How about if the basic tier demand elasticity is estimated to exceed unity? Explain.