3. Assume the market demand for wheat may be written as Q = 45 - 2p + 0.3Y + 1pb where Y refers to income and pb refers to the price of barley. Assuming that wheat and barley both sell for $1, and income is $20, calculate a. the price elasticity b. cross price elasticity between wheat and barley and c. income elasticity for wheat.

3. Assume the market demand for wheat may be written as Q = 45 - 2p + 0.3Y + 1pb where Y refers to income and pb refers to the price of barley. Assuming that wheat and barley both sell for $1, and income is $20, calculate a. the price elasticity b. cross price elasticity between wheat and barley and c. income elasticity for wheat.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 1SCQ: From the data in Table 5.5 about demand for smart phones, calculate the price elasticity of demand...

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Question

3. Assume the market demand for wheat may be
written as
Q = 45 - 2p + 0.3Y + 1pb
where Y refers to income and pb refers to the price of
barley. Assuming that wheat and barley both sell for
$1, and income is $20, calculate
a. the price elasticity
b. cross price elasticity between wheat and barley
and
c. income elasticity for wheat.

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