10. Based on the following circumstances, will there be an increase in demand for jelly-filled doughnuts or a decrease in the demand for jelly-filled doughnuts? Highlight the correct answer. Circumstance Demand for Jelly-filled Doughnuts a. The number of consumers increases. Increase / Decrease b. The consumers' income decreases. Increase / Decrease c. Jelly-filled doughnuts become the most popular snack. Increase / Decrease

10. Based on the following circumstances, will there be an increase in demand for jelly-filled doughnuts or a decrease in the demand for jelly-filled doughnuts? Highlight the correct answer. Circumstance Demand for Jelly-filled Doughnuts a. The number of consumers increases. Increase / Decrease b. The consumers' income decreases. Increase / Decrease c. Jelly-filled doughnuts become the most popular snack. Increase / Decrease

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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4. Movements along versus shifts of demand curves Consider the market demand for peanut butter Complete the following table by indicating whether an event will cause a movement along the demand curve for peanut butter or a shift of the demand curve for peanut butter, holding all else constant. Event A change in tastes of consumers that makes them desire more peanut butter An increase in the price of peanut butter A decrease in the number of consumers Movement Along Shift
20. If there is a rise in price of Galaxy chocolate, people will demand KitKat chocolate and consequently the demand for KitKat chocolate will increase. - Identify the type of demand and explain the reason and relationship.
7. Using the income elasticity of demand to characterize goods A survey taken by residents from the imaginary town of Draw City tells economists that the following changes result from an 11% fall in income: • A 13% increase in the quantity of kings demanded • A 14% decrease in the quantity of tokens demanded • A 30% decrease in the quantity of clubs demanded Compute the income elasticity of demand for each good and use the dropdown menus to complete the first column in the following table. Then, based on the income elasticities, classify each good as either a normal good or an inferior good. (Hint: Be careful to keep track of the direction of change. The sign of the income elasticity of demand can be positive or negative, and the sign gives important information.) Good Kings Tokens Clubs Income Elasticity of Demand Normal Good or Inferior Good Which of the following three goods is most likely to be classified as a luxury good? Clubs Kings Tokens
Carla consumes 10 juices per week when the price is $1.50 per unit. A reduction in this year's orange crop lead to 50% an increase in the price of juice. At the new price level Carla's weekly juice consumption cell to 6 units. calculate Carla's own-price elasticity of demand for juice.
3. Suppose that as the income level increases by 10% that the quantity demanded of that same item increases by 6%. a. Calculate the income elasticity of demand. b. What two things does the value in a tell you about the good in question?
13. Refer to the diagram below. Good Y U, YA U. Xg XA Good X The budget line shift that moves the consumer's equilibrium from point A to point B suggests: A. a decrease in the quantity demanded for product X. B. a decrease in the demand for product X. C. no change in the demand for product X. D. that X is an inferior good.
suppose pizzas and burgers are substitutes. what will definitely happen if there is an increase in the price of pizza? a. demand for burgers will increase. b. supply of burgers will decrease. c. demand for burgers will decrease. d. supply of burgers will increase.
Which of the following goods are most likely to have a negative cross-price elasticity, ceteris paribus? Oa. ice cream and candy in a snack shop. Ob. ECS2601 textbook and the study guide. C. None of the options is true. Od. ECS2601 textbook and literature textbook.
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3. If the demand for a product is perfectly price inelastic, what does the corresponding price consumption curve look like? Draw a graph to show the price consumption curve.
7. Using the income elasticity of demand to characterize goods A survey taken by residents from the imaginary town of Draw City tells economists that the following changes result from a 10% rise in income: • A 2% increase in the quantity of tokens demanded • A 17% decrease in the quantity of kings demanded • A 34% increase in the quantity of queens demanded Compute the income elasticity of demand for each good and use the dropdown menus to complete the first column in the following table. Then, based on the income elasticities, classify each good as either a normal good or an inferior good. (Hint: Be careful to keep track of the direction of change. The sign of the income elasticity of demand can be positive or negative, and the sign gives important information.) Income Elasticity of Demand Normal Good or Inferior Good Good Tokens Kings Queens Which of the following three goods is most likely to be classified as a luxury good ? O Kings Tokens Queens
7. Using the income elasticity of demand to characterize goods Data collected from the economy of Pokerville reveals that a 16% increase in income leads to the following changes: • A 6% increase in the quantity of flops demanded • A 14% decrease in the quantity of spades demanded • A 29% increase in the quantity of houses demanded Compute the income elasticity of demand for each good and use the dropdown menus to complete the first column in the following table. Then, based on its income elasticity, indicate whether each good is a normal good or an inferior good. (Hint: Be careful to keep track of the direction of change. The sign of the income elasticity of demand can be positive or negative, and the sign confers important information.) Good Income Elasticity of Demand Normal or Inferior Good Flops Spades Houses