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Assume that factors that may change demand but are not listed in the table. below do not change during the four months. Answer Q1-Q4 month income price of apple price of banana QP apple QP bañana March 160 3.50 3.00 18 20 April 160 3.50 2.50 20 16 May 220 2.50 3.00 26 24 June 160 2.50 3.00 20 16 1. Calculate the price elasticity of demand for apple. Pick two relevant months for the cal- culation and explain why you picked the two months of your choice. Show your calculations neatly. (3.5 points) 2. Is it True or False that we can say that price elasticity of demand for apple is elastic? Explain the reason. (1.5 points) 3. Calculate the income elasticity of demand for banana. Pick two relevant months for the calculation and explain why you picked the two months of your choice. Show your calcula- tions neatly. (3.5 points) 4. Is it True or False that we can say that banana is a luxury good? Explain the reason. (1.5 points)

Assume that factors that may change demand but are not listed in the table. below do not change during the four months. Answer Q1-Q4 month income price of apple price of banana QP apple QP bañana March 160 3.50 3.00 18 20 April 160 3.50 2.50 20 16 May 220 2.50 3.00 26 24 June 160 2.50 3.00 20 16 1. Calculate the price elasticity of demand for apple. Pick two relevant months for the cal- culation and explain why you picked the two months of your choice. Show your calculations neatly. (3.5 points) 2. Is it True or False that we can say that price elasticity of demand for apple is elastic? Explain the reason. (1.5 points) 3. Calculate the income elasticity of demand for banana. Pick two relevant months for the calculation and explain why you picked the two months of your choice. Show your calcula- tions neatly. (3.5 points) 4. Is it True or False that we can say that banana is a luxury good? Explain the reason. (1.5 points)

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Assume that factors that may change demand but are not listed in the table. below do not change during the four months. Answer Q1-Q4 month income price of apple price of banana QP apple QP bañana March 160 3.50 3.00 18 20 April 160 3.50 2.50 20 16 May 220 2.50 3.00 26 24 June 160 2.50 3.00 20 16 1. Calculate the price elasticity of demand for apple. Pick two relevant months for the cal- culation and explain why you picked the two months of your choice. Show your calculations neatly. (3.5 points) 2. Is it True or False that we can say that price elasticity of demand for apple is elastic? Explain the reason. (1.5 points) 3. Calculate the income elasticity of demand for banana. Pick two relevant months for the calculation and explain why you picked the two months of your choice. Show your calcula- tions neatly. (3.5 points) 4. Is it True or False that we can say that banana is a luxury good? Explain the reason. (1.5 points)
Transcribed Image Text:Assume that factors that may change demand but are not listed in the table. below do not change during the four months. Answer Q1-Q4 month income price of apple price of banana QP apple QP bañana March 160 3.50 3.00 18 20 April 160 3.50 2.50 20 16 May 220 2.50 3.00 26 24 June 160 2.50 3.00 20 16 1. Calculate the price elasticity of demand for apple. Pick two relevant months for the cal- culation and explain why you picked the two months of your choice. Show your calculations neatly. (3.5 points) 2. Is it True or False that we can say that price elasticity of demand for apple is elastic? Explain the reason. (1.5 points) 3. Calculate the income elasticity of demand for banana. Pick two relevant months for the calculation and explain why you picked the two months of your choice. Show your calcula- tions neatly. (3.5 points) 4. Is it True or False that we can say that banana is a luxury good? Explain the reason. (1.5 points)
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