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- What is an example of a change in relative price compared to a change in general price?Question: [Mia has just found a new job with a salary that is 30% higher than her old salary.] [ Will this change in income affect her consumption habits or in other words, affect the quantity demanded of different goods? Use the appropriate economic concept and explain in 100 words or less. [Suppose after increase in income, Mia ‘s visit to dentist increases by 15%, her frequency of dining out increases by 35%, her consumption of white rice falls by 25% than before. Using this information, categorise these goods (dentist visits, dining out, white rice) into ‘normal good’, ‘luxury good’ and/or ‘inferior good’. You must demonstrate all your calculations and explain logic behind your answer. There is no word limit as such but show the calculation and explain the logic in no more than 1-2 sentences.] 3. [Do you think change in Mia’s consumption behaviour in response to change in income represent the behaviour of a typical consumer. Why or why not? Present evidence to support your…The following graph shows Dmitri's weekly demand for pizza, represented by the blue line. Point A represents a point along his weekly demand. The market price of pizza is $3.00 per slice, as shown by the horizontal black line. Dmitri's Weekly Demand 7.50 6.75 6.00 5.25 Demand 8, 3.75 4.50 3.75 Price 3.00 2.25 1.50 0.75 0 2 4 8 10 12 14 16 18 20 QUANTITY (Slices of pizza) PRICE (Dollars per slice)
- Suppose buyers are affected when a new tax on soda is introduced to curb obesity. What action do the sellers take when there is a reduction in the soda tax? Demonstrate the change in the graph below by shifting the appropriate curve.The one saying that everything remaining constant, price and quantity demanded move in opposite directions? Can you think of any good/any type of good for which this isn't true? Are there any goods for which the quantity demanded increases when the price increases, or for which the quantity demanded decreases when the price decreases?One way to promote a new business is to sell a popular item at a massive discount. If Jared were to open a clothing store and sell high-end dress shoes for $100 a pair, he would likely have a line out the door. How would an economist understand the behavior of those standing in line?
- What is Lea's own-price substitution effect of the price increase due to the tax ?Discuss fully the effect of each of the following to a couple’s demand for children and other goods. Answer at ceteris paribus. 1. Increase in a couple’s income 2. Increase in the net price of childrenLorena likes to play golf. The number of times per year that she plays depends on both the price of playing a round of golf as well as 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 $11. a. Using the data under D1 and D2, calculate the cross-elasticity of Lorena’s demand for golf at all three prices. (To do this, apply the midpoints approach to the cross-elasticity of demand.) Is the cross-elasticity the same at all three prices? Are movies and golf substitute goods, complementary goods, or…
- The table below lists the prices and quantities consumed of three different goods from 2018-2020. 2018 2019 2020 Good Price ($) Quantity Price ($) Quantity Price ($) Quantity A 12 10 16 18 5 B 5 18 3 30 4 25 1 10 2 10 a. For 2018, 2019, and 2020, determine the amount that a typical consumer pays each year to purchase the quantities listed in the table above. Instructions: Round your answers to the nearest whole number. 2018 2019 2020 Consumer expenditure $ $ $ Instructions: Round your answers to one decimal place. b. The percentage change in the amount the consumer paid is % from 2018 to 2019, and % from 2019 to 2020. c. It is problematic to use your answers to part b as a measure inflation because (Click to select) v Instructions: Round your answers to one decimal place. d. Suppose we take 2018 as the base year, implying that the market basket is fixed at 2018 consumption levels. Using 2018 consumption levels, the rate of inflation was| % from 2018 to 2019, and % from 2019 to 2020.…On the following graph, plot Jake's demand for shoes using the green points (triangle symbol). Next, plot Latasha's demand for shoes using the purple points (diamond symbol). Finally, plot the market demand for shoes using the blue points (circle symbol). Note: Line segments will automatically connect the points. Remember to plot from left to right. 60 50 PRICE (Dollars per pair). 8 8 10 0 0 16 32 48 64 QUANTITY (Pairs) 80 96 Jake's Demand Latasha's Demand Market Demand (?Sharon's Quantity Demanded Paolo's Quantity Demanded Price (Dollars per cone) (Cones) (Cones) 16 12 8 5 4 On the following graph, plot Paolo's demand for ice cream cones using the green points (triangle symbol). Next, plot Sharon's demand for ice cream the market demand for ice cream using the purple points (di symbol). Finally, using the blue points ircle symbol). Note: Line segments will automatically connect the points. Remember to plot from left to right. Paolo's Demand Sharon's Demand Market Demand 12 16 20 24 QUANTITY (Cones) PRICE (Dollars per cone)