10. Consider the following table based on the article "The effect of prices on nutrition: Comparing the impact of product- and nutrient-specific taxes" by Matthew Harding and Michael Lovenheim in the Journal of Health Economics (53: 53-71). Good Strawberries Watermelons Carrots a. Price Elasticity of Demand - 1.128 C. - 0.830 - 1.379 Which of the above are normal goods? How do you know? The demand for (circle the correct answer): Strawberries is b. If average income decreases by 5 percent, calculate the change in demand for strawberries: Watermelons is Carrots is Income Elasticities 1.625 1.134 0.943 d. Strawberries and (circle the correct answer: Watermelons are Carrots are Cross Price Elasticity with Strawberries > ---- -0.058 0.025 Elastic / Inelastic Elastic / Inelastic Elastic / Inelastic Substitutes/ complements Substitutes/ complements
10. Consider the following table based on the article "The effect of prices on nutrition: Comparing the impact of product- and nutrient-specific taxes" by Matthew Harding and Michael Lovenheim in the Journal of Health Economics (53: 53-71). Good Strawberries Watermelons Carrots a. Price Elasticity of Demand - 1.128 C. - 0.830 - 1.379 Which of the above are normal goods? How do you know? The demand for (circle the correct answer): Strawberries is b. If average income decreases by 5 percent, calculate the change in demand for strawberries: Watermelons is Carrots is Income Elasticities 1.625 1.134 0.943 d. Strawberries and (circle the correct answer: Watermelons are Carrots are Cross Price Elasticity with Strawberries > ---- -0.058 0.025 Elastic / Inelastic Elastic / Inelastic Elastic / Inelastic Substitutes/ complements Substitutes/ complements
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Elastic And Its Application
Section: Chapter Questions
Problem 10PA
Related questions
Question
![10.
Consider the following table based on the article "The effect of prices on nutrition: Comparing the
impact of product- and nutrient-specific taxes" by Matthew Harding and Michael Lovenheim in the Journal of
Health Economics (53: 53-71).
Good
Strawberries
Watermelons
Carrots
a.
Price Elasticity of
Demand
- 1.128
-0.830
- 1.379
C.
Which of the above are normal goods? How do you know?
b. If average income decreases by 5 percent, calculate the change in demand for strawberries:
The demand for (circle the correct answer):
Strawberries is
Watermelons is
Income
Elasticities
1.625
1.134
0.943
Carrots is
d. Strawberries and (circle the correct answer:
Watermelons are
Cross Price Elasticity with
Strawberries
1
Carrots are
-0.058
0.025
Elastic / Inelastic
Elastic / Inelastic
Elastic / Inelastic
Substitutes/complements
Substitutes/ complements](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8eb57907-187e-426f-9237-657a265dbcd6%2F6f908730-0fb9-4158-90f1-d260468675dd%2Ff2ked54_processed.jpeg&w=3840&q=75)
Transcribed Image Text:10.
Consider the following table based on the article "The effect of prices on nutrition: Comparing the
impact of product- and nutrient-specific taxes" by Matthew Harding and Michael Lovenheim in the Journal of
Health Economics (53: 53-71).
Good
Strawberries
Watermelons
Carrots
a.
Price Elasticity of
Demand
- 1.128
-0.830
- 1.379
C.
Which of the above are normal goods? How do you know?
b. If average income decreases by 5 percent, calculate the change in demand for strawberries:
The demand for (circle the correct answer):
Strawberries is
Watermelons is
Income
Elasticities
1.625
1.134
0.943
Carrots is
d. Strawberries and (circle the correct answer:
Watermelons are
Cross Price Elasticity with
Strawberries
1
Carrots are
-0.058
0.025
Elastic / Inelastic
Elastic / Inelastic
Elastic / Inelastic
Substitutes/complements
Substitutes/ complements
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Step 1: Define Cross price elasticity and Income elasticity of demand
VIEWStep 2: Explain which of the given goods are Normal
VIEWStep 3: Calculate the change in demand for strawberries
VIEWStep 4: Find whether there is an elastic or inelastic demand
VIEWStep 5: Determine if the given goods are substitutes or complements with strawberries
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