The monthly quantity demanded for cars is shown in the table below. Demand for Cars Price (dollars) $23,000 21,000 19,000 17,000 15,000 Quantity of Cars Demanded (thousands of cars) An increase in income increases the quantity demanded by 10% at every price. Which of the following columns represents the new monthly quantity demanded for cars (in thousands of cars)? Price (dollars) $23,000 21,000 19,000 17,000 15,000 600 620 640 660 680 O Column A O Column B O Column C O Column D A 668 688 708 572 728 592 748 612 C 669 B 532 552 682 784 726 668 748 688 D 600 620 648

The monthly quantity demanded for cars is shown in the table below. Demand for Cars Price (dollars) $23,000 21,000 19,000 17,000 15,000 Quantity of Cars Demanded (thousands of cars) An increase in income increases the quantity demanded by 10% at every price. Which of the following columns represents the new monthly quantity demanded for cars (in thousands of cars)? Price (dollars) $23,000 21,000 19,000 17,000 15,000 600 620 640 660 680 O Column A O Column B O Column C O Column D A 668 688 708 572 728 592 748 612 C 669 B 532 552 682 784 726 668 748 688 D 600 620 648

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Data from the Bureau of Labor Statistics shows that U.S. income increased by 10% while consumer data shows that the quantity demanded of organic lemonade drinks changed from 80 to 85. Compute the income elasticity for organic lemonade drinks, is organic lemonade a normal or an inferior good?
Suppose the price elasticity of demand for coke is −3 and the cross-price elasticity of demand between coke and the price of Pepsi is 2.2. If the price of Pepsi decreases by 5%, what would happen to the demand for coke and what would have to happen to the price of coke to exactly offset the fall in the price of Pepsi and leave the quantity demanded of coke unchanged, respectively?
We can divide normal goods into two types: Those whose income elasticity is less than one and those whose income elasticity is greater than one. Think about products that would fall into each category-explain your reasoning for each categorization.
According to the U.S. Department of Energy, the average price of gasoline in the U.S. fell by 14% in 2015. The number of hybrid electric vehicles (HEV) sold in the U.S. fell by 36% in the same year. Calculate the cross-price elasticity of demand for HEVs and gasoline. Round answer to one place after the decimal.
To calculate an elasticity coefficient of demand, we need to Divide the percentage change in the price by the percentage change in the quantity demanded Multiply the percentage change in the quantity demanded by the percentage change in the price Know the slope of the demand curve Multiply the percentage change in the price by the percentage change in the quantity demanded
Suppose that consumers experience a 5 percent increase in income and purchase walking shoes increase by 6 percent. What is the income elasticity for walking shoes? (Give your answer to one decimal place.)
if there is any diagram can you add it. Given the following demand and supply equations: QD = 10 - 0.8P + 5Y + A QS = -10 + P where Q = quantity (million units per month), P = price (€ per unit). Y = average monthly income (€000) and A monthly advertising expenditure (€000). Suppose average monthly income is €4,000 and monthly advertising expenditure is €50,000: (a) Find the market equilibrium price and quantity. (b) Find total welfare when the market is in equilibrium. (c) Find the price elasticity and income elasticities of demand and price elasticity of supply at equilibrium. Interpret your results. (d) What would be the effect of a price ceiling of €60? Explain. (e) Suppose a tax of €8 per unit is introduced: (i) What is the effect on market price and quantity? Explain. (ii) What is the impact of the tax on total welfare? Explain. (iii) How is the incidence of the tax shared between the consumer and the supplier? Explain
Netflix raises the price of its service from $11 per month to $14 per month. This causes the number of people subscribing to HCCCtinder – a school-specific dating app – to rise from 2,200 to 2,500. What is the cross-price elasticity of demand? Based upon your answer, are Netflix and HCCCtinder substitutes or compliments?
Step 1: Fill in the appropriate values for original quantity, new quantity, original price, and new price. Step 2: Calculate the average quantity by adding the original quantity and the new quantity, and then dividing by two. Do the same for the average price. Step 3: Calculate the change in quantity by subtracting the original quantity from the new quantity. Do the same for the change in price. Step 4: Calculate the percentage change in quantity demanded by dividing the change in quantity by the average quantity. Do the same to calculate the percentage change in price. Step 5: Calculate the price elasticity of demand by dividing the percentage change in quantity demanded by the percentage change in price, ignoring the negative sign. Using the midpoint method, the elasticity of demand for headsets is about (.44/1.14/2.28/4.56)
If price elasticity of supply of a good = 1.45 , how do you interpret this? If price elasticity of supply of a good = 0.45 , how do you interpret this? If price elasticity of supply of a good = 1.00 , how do you interpret this?
Suppose that the price elasticity of demand for a packet of cigar is -0.85 and the price elasticity of supply is 1.5 at market equilibrium. As a result of an increase on sales tax, the new equilibrium price rises by 15%. (a) What is the percentage change in quantity demanded of cigar? Show your calculation.