There is a debate about whether sterile hypodermic needles should be passed out free of charge in cities with high illegal druguse. Proponents argue that doing so will reduce the incidence of diseases, such as HIV/AIDS, that are often spread by needlesharing among drug users. Opponents believe that doing so will encourage more drug use by reducing the risks of this behavior.As an economist asked to assess the policy, you must know the following: (i) how responsive the spread of diseases likeHIV/AIDS is to the price of sterile needles and (ii) how responsive drug use is to the price of sterile needles. Assuming that youknow these two things, use the concepts of price elasticity of demand for sterile needles and the cross-price elasticity betweendrugs and sterile needles to answer the following questions.Which of the following would have to be true for this policy to be beneficial to cities?0The price elasticity of demand for sterile needles is relatively elastic.The cross-price elasticity of demand between drugs and sterile needles indicates they are weakly complementary.The cross-price elasticity of demand between drugs and sterile needles indicates they are strong substitutes.The price elasticity of demand for sterile needles is relatively inelastic.Incorrect

The price elasticity of demand is a measure of how responsive the quantity demanded of a good or…

Which of the following would have to be true for this policy to be beneficial to cities? The price elasticity of demand for sterile needles is relatively elastic. The cross-price elasticity of demand between drugs and sterile needles indicates they are weakly complementary. The cross-price elasticity of demand between drugs and sterile needles indicates they are strong substitutes. The price elasticity of demand for sterile needles is relatively inelastic.

Which of the following would have to be true for this policy to be beneficial to cities? The price elasticity of demand for sterile needles is relatively elastic. The cross-price elasticity of demand between drugs and sterile needles indicates they are weakly complementary. The cross-price elasticity of demand between drugs and sterile needles indicates they are strong substitutes. The price elasticity of demand for sterile needles is relatively inelastic.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Aura Healthy Drinks company private limited concludes that the demand function for its product X is: Qx = 1000 – 0.2 Px + 0.5 Py + 0.04 Y + 0.01 A Qx = Quantity demanded for its product X Px = Price of X Py = Price of Y (a substitute of product X) Y= Consumers income A= Advertisement expenditure of the firm At present price of the product X is Rs. 100. Price of its substitute product Y is Rs. 120. Consumers income is Rs. 10,000 and Advertisement expenditure of the Aura Healthy DrinksCompany Pvt. Ltd. Is Rs. 6000? Questions: 1. What is the current level of demand for the product of Aura Healthy DrinksCompany? 2. Calculate price elasticity for the firm’s product of X? 3. Calculate Advertising elasticity for the firm’s product X? 4. Calculate cross elasticity of demand between its product X and rival’s product Y? If the firm reduces price of X by 20 %, what will be the impact on its demand?
A study of the effects of the minimum wage on employment of low-skilled workers estimated the price elasticity of demand for low-skilled workers is -0.75. Suppose that the government is considering raising the minimum wage from $7.25 per hour to $7.75 per hour. Based on this information, calculate the percentage change in the employment of low skilled workers. Use the midpoint formula?
Consider the demand and supply for illicit drugs. Assume you have been appointed by the government to recommend on an optimal policy to tackle the problem. You are told that the price elasticity of demand (or own-price elasticity) is <1 (i.e., inelastic) and that the price elasticity of supply is >1 (i.e., elastic). Would you recommend the government intervene on the demand side or the supply side. Explain your answer. What sorts of policies would you recommend?
Suppose Nationwide increases the insurance premium they charge for their auto policies by 8 percent. In response, the demand for State Farm auto policies in a small town increases from 6,000 to 6,900. What is the cross-price elasticity of demand for State Farm auto policies in this town? Using the midpoint formula, the cross-price elasticity of demand for State Farm auto policies (Enter your response rounded to three decimal places) In this instance, auto insurance from Nationwide and auto insurance from State Farm are
In the presence of insurance coverage, over the counter purchases of drugs like acetaminophen, ibuprofen and naproxen sodium will have a higher elasticity of demand than physician prescribed drugs. True False
What does income elasticity of demand mean for insurance companies and medical providers for making a decision?
Suppose you're trying to compare the year-to-year performance of one of your regional salespeople over a period during which income grew by 3%. If demand for your products has an income elasticity of 2, how would you measure the salesperson's performance?
Suppose that you observe that when the price of a particular vaccine falls by 4%, the quantity purchased____ by 2%. This implies that this vaccine is price in demand and that the price elasticity of demand is equal to ______ falls; elastic; 2 falls; inelastic; 0.5 rises; elastic; 2 rises; inelastic; 0.5
Amy is a graduate student living in Dallas who works as a caddy to supplement their normal income. At an hourly wage rate of $15, they are willing to caddy 5 hours per week. Upping the wage to $25 per hour, they are willing to caddy 14 hours per week. Using the midpoint method, the elasticity of Amy’s labor supply between the wages of $15 and $25 per hour is approximately (0.06, 0.53, 1.89, 10.56) , which means that Amy’s supply of labor over this wage range is (elastic/inelastic) .
Question 12 In order to bring to South Korea a Therapy-based mental health app, you first need to roughly estimate your market demand. Your market research (country report) yields the following statistics: -Therapy mental health app users in China: 30M -Total adult population in China: 1.2B -Total adult population in Korea: 40M -Smartphone ownership in Korea: 94% -At least "somewhat interested" in mental health products in Korea: 30% -Currently using similar apps (mediation or mindfulness) in Korea: 4M According to the Analogy method, market demand estimate could be: 4M 30M/3 = 10M (because Korean population is one third of the Chinese population) 30M Both options 1) and 2)
Since the supply curve intersects the horizontal axis, all of the points along the supply curve shown are inelastic: True or false and Explain your choice Most likely, the elasticity of demand for transportation is greater than the elasticity of demand for cars. Revenue remains unchanged along a straight-line demand curve.
Need help! please show full steps