5. Taxes and the impact on relative price In her school's food court, Jamie notices that a carton of juice costs $1.75 and a can of soda costs $1.25. Since Jamie just finished studying for an economics exam, she immediately calculates that the relative price of a carton of juice is per Suppose that school administrators want to encourage healthy choices and decide to impose a $0.25 price increase on cans of soda. Given that the absolute price of a carton of juice is unchanged, the relative price of a carton of juice

5. Taxes and the impact on relative price In her school's food court, Jamie notices that a carton of juice costs $1.75 and a can of soda costs $1.25. Since Jamie just finished studying for an economics exam, she immediately calculates that the relative price of a carton of juice is per Suppose that school administrators want to encourage healthy choices and decide to impose a $0.25 price increase on cans of soda. Given that the absolute price of a carton of juice is unchanged, the relative price of a carton of juice

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 17P: If a 10 decrease in the price of one product that you buy causes an 8 increase in quantity demanded...

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If the price of petrol increases from 70 cents to 77 cents per litre, and as a resultthe quantity demanded decreases from 1000 to 995 litres, calculate the priceelasticity of demand. 2. If the original price and quantity demand are $0.50 and 50 respectively, andthere is an increase in price to $0.55, and quantity demanded falls to 10,calculate the price elasticity of demand. 3. An individual has allocated income so as to maximise total utility and hasmarginal utility of coffee (per cup per week) that is four times that of tea (percup per week) but only a quarter of that of pepperoni pizza. If a pepperonipizza is $16, You are required to calculatea) Price of coffee per cup. b) Price of tea per cup.
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fl you know that Linda's consumption of potatoes fell from 200 pounds a year to 150 pounds a year when her income went up from $50,000 to $60,000 a year, you are able to calculate Linda's incomeelasticity of demand for potatoes. What is it? What do economists call this kind of a good?
Market researches have studied the market for milk,and their estimates for the supply of and the demand for milk per month are as follows:a.Using the data,graph the demand for and the supply for milk.Identify the equilibrium point as E,and use dotted lines to connect E to the equilibrium price onthe price axis and the equilibrium quantity on the quantity axis.b.Suppose the government enacts amilk price support of $8per gallon.Indicate this action on your graph,and explain the effect on the milk market?Why would the government establish such a price support?c.Now assume the government decides to set a price ceiling of $4 dollar per gallon.Show and explain how this legal price effects your graph of the milk market.What objective could the government be trying to achieve by establishing such a price ceiling?
Think of ticket scalpers at a rock concert, a baseball game, oran opera. Might they exist because the tickets to these eventswere originally sold for less than the equilibrium price? Whyor why not? In what way is a ticket scalper like and unlikeyour retail grocer, who buys food from a wholesaler and thensells it to you?
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What does a downward-sloping demand curve mean about how buyers in a market will react to a higher price?