It's not -10 or 10 In the following questions, give all your answers to two decimals.Patrice works as an economist for the Bureau of Labor Statistics (BLS). Her current project is to estimate the effect of changes inincome, prices of related goods, and the price of potatoes on the demand for beef. Patrice has the following data:Price elasticity of demand for beef-0.80Income elasticity of demand for beef+ 1.40Cross-price elasticity between beef and chicken+1.20Cross-price elasticity between beef and potatoes-0.50Suppose the price of beef rises by 8%. All else equal, the quantity of beef demanded wouldfallby 6.4%. If the price of potatoes rises by 20%, the quantity of beef demanded wouldfallby |%.

Answered: If the price of potatoes rises by 20%,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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It's not -10 or 10

If the price of potatoes rises by 20%, the quantity of beef demanded would
fall
by |
%.

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Step 1

Own price elasticity of demand refers to the % change in the quantity demanded due to the % change in the price level. On the other hand, the cross price elasticity between two goods is the % change in the demand for one good due to the % change in the price of other good.

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