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Use the table below to answer the next question.

INCOME

QUANTITY PURCHASED

Automobiles

Coffee

Tea

$30,000

2

10

5

$45,000

3

8

10

6. What is the cross-price elasticity between coffee and tea?

a) -.42

b) 1.07

c) -.94

d) -1.87

e) We don't have enough information to calculate cross-price elasticity.

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Chika Ilonah
Chika IlonahLv10
28 Sep 2019

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Question 11 INCOME QUANTITY PURCHASED Automobiles Coffee Tea $45,000 4 8 5 $30,000 2 10 10 Refer to table above. What is the income elasticity of demand for coffee? Answers: A. .45 B. 2.6 C. -.75 D. -1.33 E. We don’t have enough information to calculate income elasticity Question 12 A price elasticity of demand for good X equal to -.75 implies Answers: A. if price increases $1.00, demand will decrease by .75 B. if price decreases by $.75,quantity demanded will increase by 1 C. if price increases by 1%, demand will decrease by .75% D. if price decreases by 1%, quantity demanded will increase by .75% E. a price of $1.00 will result in a sales increase of .75 units Question 13 Suppose the demand curve for soda pop drinks in ounces is: P = 200 – 2QD and the supply curve is: P = 100 + 3QS. What are the consumer and producer surplus, respectively, in the market at the equilibrium price and quantity? Answers: A. $800, $600 B. $1400, $600 C. $400, $ 600 D. $400, $ 1000 E. Cannot be determined from the information given

(a) Explain why the cross elasticity of demand for substitute goods is positive and the cross elasticity of demand for complements is negative.

(b) Explain why the price elasticity of demand changes along a linear demand curve.

(c)

Income Px Py Quantity of good x Quantity of good y
$30,000 $6 $3 2  20 
$50,000 $6 $4  5 10

(i) Using the information in the table, calculate the income elasticity of demand for good X and characterize the good. Use the midpoint formula.

(ii) Can you calculate the income elasticity of demand for good Y? If you can, show your calculation and characterize the good. If you cannot, explain why.

microeconomics help

In a job interview, SuperlativeBuy asks you whether they should run a 15% sale or not. They give you the following data about past sales and the behavior of two groups: loyalty-rewards members and those who aren't. Using the information below, justify whether they should run the 15% sale for loyalty-rewards members only, non-rewards members only, or both. (2 points for own-price elasticity of demand calculations and answer for loyalty-rewards members; 2 points for the same for non-rewards members; 2 points for loyalty-, non-, or both)

The quantity demanded by loyalty-rewards members increased from 1,482,000 to 1,567,000.

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The cross-price elasticity of Taco Siren and Taco Paul's is +1.89. The cross-price elasticity of pizza and pizza bagels is +.77. Why is the cross-elasticity of Taco Siren and Taco Paul's greater than the cross-price elasticity of pizza and bagels? (2 points for defining cross-price elasticity; 2 points for unpacking what each cross-price of elasticity means; 2 points for answering question)

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With the information given, is it possible to estimate of what will happen to the demand for Carhenge T-shirts when the price of a T-shirt is $12 and average tourist income increases from $40,000 to $50,000? If so, what is your estimate? (2 points)

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10 2,845 5,833
12 2,087 4,199
15 1,195 2,802
18 345 1,975

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