Lorena's income and the cost of other types of entertainment-in particular, how much it costs to go see a movie instead of playing golf. The three demand schedules in the table below show how many rounds of golf per year Lorena will demand at each price under three different scenarios. In scenario D1, Lorena's income is $50,000 per year and movies cost $9 each. In scenario D2, Lorena's income is also $50,000 per year, but the price of seeing a movie rises to $11. And in scenario D3, Lorena's income goes up to $70,000 per year, while movies cost $11. D1 Scenario D2 D3 Income per year $50,000 $50,000 $70,000 Price of movie ticket $9 $11 $11 Quantity Demanded Price of Golf $50 15 10 15 $35 25 15 30 $20 40 20 50 Instructions: Round your answers to 2 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 Di and D2, calculate the cross elasticity of Lorena's demand for golf at all three prices. (To do this, apply the midpoints approach to the cross elasticity of demand.) At $50, cross elasticity At $35, cross elasticity At $20, 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) b. Using the data under D2 and D3, calculate the income elasticity of Lorena's demand for golf at all three prices. (To do this, apply the midpoints approach to the income elasticity of demand.) At $50, income elasticity of demand At $35, income elasticity of demand = At $20, income elasticity of demand Is the income elasticity the same at all three prices? (Click to select) Is golf an inferior good? (Click to select)
Lorena's income and the cost of other types of entertainment-in particular, how much it costs to go see a movie instead of playing golf. The three demand schedules in the table below show how many rounds of golf per year Lorena will demand at each price under three different scenarios. In scenario D1, Lorena's income is $50,000 per year and movies cost $9 each. In scenario D2, Lorena's income is also $50,000 per year, but the price of seeing a movie rises to $11. And in scenario D3, Lorena's income goes up to $70,000 per year, while movies cost $11. D1 Scenario D2 D3 Income per year $50,000 $50,000 $70,000 Price of movie ticket $9 $11 $11 Quantity Demanded Price of Golf $50 15 10 15 $35 25 15 30 $20 40 20 50 Instructions: Round your answers to 2 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 Di and D2, calculate the cross elasticity of Lorena's demand for golf at all three prices. (To do this, apply the midpoints approach to the cross elasticity of demand.) At $50, cross elasticity At $35, cross elasticity At $20, 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) b. Using the data under D2 and D3, calculate the income elasticity of Lorena's demand for golf at all three prices. (To do this, apply the midpoints approach to the income elasticity of demand.) At $50, income elasticity of demand At $35, income elasticity of demand = At $20, income elasticity of demand Is the income elasticity the same at all three prices? (Click to select) Is golf an inferior good? (Click to select)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Lorena's income and the cost of other types of entertainment-in particular, how much it costs to go see a movie instead of playing
golf. The three demand schedules in the table below show how many rounds of golf per year Lorena will demand at each price under
three different scenarios. In scenario D1, Lorena's income is $50,000 per year and movies cost $9 each. In scenario D2, Lorena's
income is also $50,000 per year, but the price of seeing a movie rises to $11. And in scenario D3, Lorena's income goes up to $70,000
per year, while movies cost $11.
D1
Scenario
D2
D3
Income per year
$50,000
$50,000
$70,000
Price of movie ticket
$9
$11
$11
Quantity Demanded
Price of Golf
$50
15
10
15
$35
25
15
30
$20
40
20
50
Instructions: Round your answers to 2 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 Di and D2, calculate the cross elasticity of Lorena's demand for golf at all three prices. (To do this, apply the
midpoints approach to the cross elasticity of demand.)
At $50, cross elasticity
At $35, cross elasticity
At $20, cross elasticity
Is the cross elasticity the same at all three prices? ( (Click to select)
Transcribed Image Text:Are movies and golf substitute goods, complementary goods, or independent goods? (Click to select)
b. Using the data under D2 and D3, calculate the income elasticity of Lorena's demand for golf at all three prices. (To do this, apply the
midpoints approach to the income elasticity of demand.)
At $50, income elasticity of demand
At $35, income elasticity of demand =
At $20, income elasticity of demand
Is the income elasticity the same at all three prices?
(Click to select)
Is golf an inferior good? (Click to select)
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