The prices and elasticities for some different types of food are summarised in Table 1. Table 1: Price elasticities of demand for different types of food. Тypical Spending per week (S) Price Elasticity of Demand (in absolute value) Food Calories Categories per serving Price per 100 g (S) Fruit Vegetables 660 0.4 1.13 140 0.35 3.5 0.85 Pasta 1550 0.4 0.88 Bread 950 0.6 2.5 0.29 Snacks 430 1.2 5 0.27 Candy Milk - A 1750 0.7 0.30 2100 0.1 2.5 1.78 Milk - B 880 0.2 1.5 1.98 Government plans to keep people healthy by discouraging consumption of high-calorie food. A 20% excite tax will be imposed on one of the high-calorie food items which contains calories more than 1550 per serving. For three different policy goals: (1) maximization of tax revenue, (i1) maximization of reduction in high-calorie food consumption and (iii) minimization of loss in market efficiency (or deadweight loss), select the best policy choice as your recommendation for imposing the tax. Explain the rationale of your recommendation.

The prices and elasticities for some different types of food are summarised in Table 1. Table 1: Price elasticities of demand for different types of food. Тypical Spending per week (S) Price Elasticity of Demand (in absolute value) Food Calories Categories per serving Price per 100 g (S) Fruit Vegetables 660 0.4 1.13 140 0.35 3.5 0.85 Pasta 1550 0.4 0.88 Bread 950 0.6 2.5 0.29 Snacks 430 1.2 5 0.27 Candy Milk - A 1750 0.7 0.30 2100 0.1 2.5 1.78 Milk - B 880 0.2 1.5 1.98 Government plans to keep people healthy by discouraging consumption of high-calorie food. A 20% excite tax will be imposed on one of the high-calorie food items which contains calories more than 1550 per serving. For three different policy goals: (1) maximization of tax revenue, (i1) maximization of reduction in high-calorie food consumption and (iii) minimization of loss in market efficiency (or deadweight loss), select the best policy choice as your recommendation for imposing the tax. Explain the rationale of your recommendation.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The following table contains a monthly demand and supply schedule for large, single- topping, carry-out pizza Pizza Price (per pack) Quantity demanded for pizza (per pack) Quantity supplied for pizza (per pack) Quantity demanded for good Y $21 6000 7900 6000 $19 7000 7200 8000 $17 8000 6500 10000 (A) Calculate the price elasticity Of demand (PED) for good X when price fall from S 19 to $ 17. (B) Suppose you are the sellers of pizza based on the value of PED obtained In your answer for Question(A), would you or would you not raise the price of pizza? Why? (C)What S the cross elasbcity of demand (CED) of Good Y when price of carry-out pizza fall from $19 to S17? How is pizza and the Good Y related?
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When the price of kittens was $20 each, the pet shop sold 20 per month. When they raised the price to $30 each, they sold 14 per month. What is the elasticity of demand for kittens? 1.66 Another value (not listed) 0.88 0.66 1.36
reases, consumels ce changes of products with only Ul Classroom activity 5.4 V 1. Name seven factors that influence price elasticity of demand. (14) 2.) Identify whether demand for the following will tend to be elastic or inelastic: (10) a) Fresh meat that lasts a few days b) Necessary milk c) White bread that has a substitute d) Cheap candles e) Petrol with no substitute f) Expensive motor cars g) Durable shoes h) A multi-purpose frying pan i) Cigarettes for a smoker i) Demand in the long run
Suppose the accompanying table contains data on how many Veggie Delite sandwiches Subway is willing to sell each day at two different prices. Calculate the daily price elasticity of supply when the price increases from $5.00 to $7.50. Please round to the nearest hundredth. Price(per sandwich) Quantity supplied(sandwiches per day) $5.00 200,000 $7.50 210,000 a. Daily price elasticity of supply for Veggie Delite sandwiches = b. The daily price elasticity of supply for Veggie Delite sandwiches is relatively Elastic or Inelastic Now consider how responsive Subway’s supply of Veggie Delite sandwiches is to changes in price on an annual basis instead of a daily basis. c. Compared to the daily value, the annual price elasticity of supply for Veggie Delite sandwiches is likely to be more Inelastic or Elastic and the annual supply curve is likely Flatter or Steeper to be than the daily supply curve.
Listen The price elasticity of supply of hot dog buns is estimated to be 1.5, Holding everything else constant, this means that a 10 percent decrease in the price of hot dog buns will cause the quantity of hot dog buns supplied to decrease by approximately 25 percent 1.5 percent 15 percent approximately 5 percent Previous Page Next Page Page 16 of 28
Problem #3: From the data shown in the figure about demand for smart phones, calculate the price elasticity of demand from: point B to point Cand point D to point E. Classify the elasticity at each point as elastic, inelastic, or unit elastic. Points Price Quantity Demanded 70 3 000 80 2 800 90 2 400 100 2 200 E 110 2 000
Q.17 What would be the coefficient of price-elasticity of demand when the percentage increase in the quantity demanded is lesser than the percentage decrease in its price: (a) Equal to one (b) More than one (c) Less than one (d) None of the above
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4) Refer to the graph below. Using the midpoint elasticity formula, the value of price elasticity of demand equals: 50 100 Quantity Price (S) 22 10 a) 6.0 b) 2.5 c) 0.27 d) 3.7 e) None of the above.
The correct answer is not -2 If you think you've entered the right answer, check your spelling or try a hint! When an oil company increases the price of its gasoline from $3.80 to $4.20, the demand for another company's gasoline increases from 90 to 110 gallons. Using the midpoint method, one decimal place, and the negative sign if necessary, the cross-price elasticity between the two hrands of gasoline is Need help on this question? Read the ebook page on this topic .(no penalty)
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