Suppose the demand schedule for burritos is as follows: Quantity Demanded (Income = $90,000) 25 Quantity Demanded (Income $30,000) Price 20 $5 22 16 15 12 10 8 6 4 $$999 increases from $30,000 to $90,000 if the price is $6. Does this calculation suggest that burritos are a normal or inferior good? Explain. 5. (Refer to the Table on p.1) Calculate your income elasticity of demand when your income 6. Suppose the price elasticity of demand for cigarettes equals 0.27 in North Dakota and 1.95 in Minnesota. To increase revenues, cigarette manufacturers would (increase prices / leave prices unchanged / decrease prices) in North Dakota and (increase prices/ leave prices unchanged / decrease prices) in Minnesota Explain each answer briefly.
Suppose the demand schedule for burritos is as follows: Quantity Demanded (Income = $90,000) 25 Quantity Demanded (Income $30,000) Price 20 $5 22 16 15 12 10 8 6 4 $$999 increases from $30,000 to $90,000 if the price is $6. Does this calculation suggest that burritos are a normal or inferior good? Explain. 5. (Refer to the Table on p.1) Calculate your income elasticity of demand when your income 6. Suppose the price elasticity of demand for cigarettes equals 0.27 in North Dakota and 1.95 in Minnesota. To increase revenues, cigarette manufacturers would (increase prices / leave prices unchanged / decrease prices) in North Dakota and (increase prices/ leave prices unchanged / decrease prices) in Minnesota Explain each answer briefly.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Transcribed Image Text:Suppose the demand schedule for burritos is as follows:
Quantity Demanded (Income = $90,000)
25
Quantity Demanded (Income $30,000)
Price
20
$5
22
16
15
12
10
8
6
4
$$999
Transcribed Image Text:increases from $30,000 to $90,000 if the price is $6. Does this calculation suggest that burritos
are a normal or inferior good? Explain.
5. (Refer to the Table on p.1) Calculate your income elasticity of demand when your income
6.
Suppose the price elasticity of demand for cigarettes equals 0.27 in North Dakota and 1.95 in
Minnesota. To increase revenues, cigarette manufacturers would
(increase prices / leave prices unchanged / decrease prices) in North Dakota
and
(increase prices/ leave prices unchanged / decrease prices) in Minnesota
Explain each answer briefly.
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