Inbee likes to play golf. The number of times per year that she plays depends on the price of playing a round of golf, her income, and the price of other types of entertainment-in particular, the price of going to a movie instead of playing golf. The three demand schedules in the table below show how many rounds of golf per year Inbee will demand at each price under three different scenarios. In scenario D₁, Inbee's income is $70,000 per year and movies cost $13 each. In scenario D2, Inbee's income is also $70,000 per year, but the price of seeing a movie rises to $15. And in scenario D3, Inbee's income goes up to $90,000 per year, while movies cost $15. Scenario D2 $70,000 D₂ $90,000 $15 Income per year D₁ $70,000 Price of movie ticket $13 $15 Price of Golf Quantity Demanded $60 15 10 15 $45 25 15 30 $30 40 20 50 Instructions: Round your answers to two decimal places. If you are entering any negative numbers, be sure to include a negative sign (-) in front of those numbers. a. Using the data under D1 and D2, calculate the cross elasticity of Inbee's demand for golf at all three prices. (To do so, apply the midpoint approach to the cross elasticity of demand.) At $60, cross elasticity=| At $45, cross elasticity = At $30, cross elasticity =| Is the cross elasticity the same at all three prices? (Click to select) Are movies and golf substitute goods, complementary goods, or independent goods? (Click to select)
Inbee likes to play golf. The number of times per year that she plays depends on the price of playing a round of golf, her income, and the price of other types of entertainment-in particular, the price of going to a movie instead of playing golf. The three demand schedules in the table below show how many rounds of golf per year Inbee will demand at each price under three different scenarios. In scenario D₁, Inbee's income is $70,000 per year and movies cost $13 each. In scenario D2, Inbee's income is also $70,000 per year, but the price of seeing a movie rises to $15. And in scenario D3, Inbee's income goes up to $90,000 per year, while movies cost $15. Scenario D2 $70,000 D₂ $90,000 $15 Income per year D₁ $70,000 Price of movie ticket $13 $15 Price of Golf Quantity Demanded $60 15 10 15 $45 25 15 30 $30 40 20 50 Instructions: Round your answers to two decimal places. If you are entering any negative numbers, be sure to include a negative sign (-) in front of those numbers. a. Using the data under D1 and D2, calculate the cross elasticity of Inbee's demand for golf at all three prices. (To do so, apply the midpoint approach to the cross elasticity of demand.) At $60, cross elasticity=| At $45, cross elasticity = At $30, cross elasticity =| Is the cross elasticity the same at all three prices? (Click to select) Are movies and golf substitute goods, complementary goods, or independent goods? (Click to select)
Chapter6: Demand Relationships Among Goods
Section: Chapter Questions
Problem 6.9P
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Transcribed Image Text:Inbee likes to play golf. The number of times per year that she plays depends on the price of playing a round of golf, her income, and
the price of other types of entertainment-in particular, the price of going to a movie instead of playing golf. The three demand
schedules in the table below show how many rounds of golf per year Inbee will demand at each price under three different scenarios.
In scenario D₁, Inbee's income is $70,000 per year and movies cost $13 each. In scenario D2, Inbee's income is also $70,000 per year,
but the price of seeing a movie rises to $15. And in scenario D3, Inbee's income goes up to $90,000 per year, while movies cost $15.
Scenario
D2
$70,000
D₂
$90,000
$15
Income per year
D₁
$70,000
Price of movie ticket
$13
$15
Price of Golf
Quantity Demanded
$60
15
10
15
$45
25
15
30
$30
40
20
50
Instructions: Round your answers to two decimal places. If you are entering any negative numbers, be sure to include a negative sign
(-) in front of those numbers.
a. Using the data under D1 and D2, calculate the cross elasticity of Inbee's demand for golf at all three prices. (To do so, apply the
midpoint approach to the cross elasticity of demand.)
At $60, cross elasticity=|
At $45, cross elasticity =
At $30, cross elasticity =|
Is the cross elasticity the same at all three prices? (Click to select)
Are movies and golf substitute goods, complementary goods, or independent goods? (Click to select)
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