Principles Of Economics 2e
2nd Edition
ISBN: 9781680920864
Author: Timothy Taylor, Steven A. Greenlaw, David Shapiro
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Textbook Question
Chapter 3, Problem 44CTQ
Use the four-step process to analyze the impact of a Deduction in tariffs on imports of iPods on the
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Assume that a retailer sells 1000 six-packs of Pepsi per day at a price of $3.25/six-pack. You as an
economic analyst, estimate that the cross-price elasticity between Pepsi and Coca-Cola is 0.6. If the
retailer raises the price of Coca-Cola from $3.00 to $3.30/six-pack, how would sales of Pepsi be affected,
ceteris paribus?
Sales of Pepsi would not be affected at all
Sales of Pepsi would rise by 30 six-packs
Sales of Pepsi would rise by 60 six-packs
а.
b.
с.
d. Can't tell; insufficient information
Suppose the price of color print film has recently risen by 10% due to an increase in the cost of silver that is used to make film. As a result, less film is being sold in the camera store where you work. You do some checking and find that camera sales are down by 4% too. What is the cross- price elasticity of demand for cameras and film ? Are these two goods complement goods or substitute goods?
Chapter 3 Solutions
Principles Of Economics 2e
Ch. 3 - Review Figure 3.4. Suppose the price of gasoline...Ch. 3 - Why do economists use the ceteris paribus...Ch. 3 - In an analysis of the market for paint, an...Ch. 3 - Many changes are affecting the market for oil....Ch. 3 - Lets think about the market for air travel. From...Ch. 3 - A tariff is a tax on imported goods. Suppose the...Ch. 3 - What is the effect of a price ceiling on the...Ch. 3 - Does a price ceiling change the equilibrium price?Ch. 3 - What would be the impact of imposing a price flour...Ch. 3 - Does a price ceiling increase the decrease the...
Ch. 3 - If a price floor benefits producers, why does a...Ch. 3 - What determines the level of prices in a market?Ch. 3 - What does a downward-sloping demand curve mean...Ch. 3 - Will demand curves have the same exact shape in...Ch. 3 - Will supply curves have the same shape in all...Ch. 3 - What is the relationship between quantity Demanded...Ch. 3 - How can you locate the equilibrium point on a...Ch. 3 - If the price is above line equilibrium level,...Ch. 3 - When the price is above the equilibrium, explain...Ch. 3 - What is the difference between the demand and the...Ch. 3 - What is the difference between the supply and the...Ch. 3 - When analyzing a market, how do economists deal...Ch. 3 - Name some factors that can cause a shift in line...Ch. 3 - Name some farm that can cause a shift in the...Ch. 3 - How does one analyze a market where both demand...Ch. 3 - What causes a movement along the demand curve?...Ch. 3 - Does a price ceiling attempt to make a price...Ch. 3 - How does a price ceiling set below the equilibrium...Ch. 3 - Does a price floor attempt to make a price higher...Ch. 3 - How does a price floor 521 above the equilibrium...Ch. 3 - What is consumer surplus? How is it illustrated on...Ch. 3 - What is producer surplus? How is it illustrated on...Ch. 3 - What is total surplus? How is it illustrated on a...Ch. 3 - What is the relationship between total surplus and...Ch. 3 - What is deadweight loss?Ch. 3 - Review Figure 3.4. Suppose the government decided...Ch. 3 - Explain why the following statement is false: In...Ch. 3 - Explain why the following statement is false: In...Ch. 3 - Consider the demand for hamburgers. If the price...Ch. 3 - How do you suppose the demographics of an aging...Ch. 3 - We know that a change in the price of a product...Ch. 3 - Suppose there is a soda tax to curb obesity. What...Ch. 3 - Use the four-step process to analyze the impact of...Ch. 3 - Use the four-step process to analyze the impact of...Ch. 3 - Suppose both of these events took place at the...Ch. 3 - Must government policy decisions have winners and...Ch. 3 - Agricultural price supports result in governments...Ch. 3 - Can you propose a policy that meld induce the...Ch. 3 - What term would an economist use to describe what...Ch. 3 - Explain why voluntary Martians improve social...Ch. 3 - Why would a free market mar operate at a quantity...Ch. 3 - Review Figure 3.4 again. Suppose the price of...Ch. 3 - Table 3.8 shows information on the demand and...Ch. 3 - The computer market in recent years has seen many...Ch. 3 - Table 3.9 illustrates the markets demand and...Ch. 3 - Table 3.10 shows the supply and demand for movie...Ch. 3 - A low-income county decides to set a price ceiling...
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Similar questions
- Using the following equation for the demand for a good or service, calculate the price elasticity of demand (using the point form), cross-price elasticity with good x and income elasticity. Q=82P+0.10I+Px Q is quantity demanded, P is the product price. P1 is the price of a related good, and I is income. Assume that P= $10, I = 100, and Px = 20.arrow_forwardAs the price of good X rises from 10 to 12, the quantity demanded of good Y rises from 100 units to 114 units. Are X and Y substitutes or complements? What is the cross elasticity of demand?arrow_forwardEstimates presented in Exhibit 5 show that Android users have a higher price elasticity of demand for apps in the Google Play Store than do iPhone users in the Apple App Store. Why might Android users tend to be more sensitive to app prices than iPhone users? What categories or types of apps (for example, games/social media) do you think have the highest price elasticities?arrow_forward
- What are the major determinants of a products price elasticity of demand? Studies indicate that the demand for Florida oranges, Bayer aspirin, watermelons, and airfares to Europe are elastic. Why?arrow_forward(Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of Si per unit. A reduction in price to $0.20 results in an increase in quantity demanded to 70 units. Using the midpoint formula, show that these data yield a price elasticity of 0.25. By what percentage would a 10 percent rise in the price reduce the quantity demanded, assuming price elasticity remains constant along the demand curve?arrow_forwardSuppose a straight-line downward-sloping demand curve shifts rightward. Is the price elasticity of demand higher, lower, or the same between any two prices on the new (higher) demand curve than on the old (lower) demand curve?arrow_forward
- Suppose a movie theater raises the price of popcorn 10 percent, but customers do not buy any less popcorn. What does this tell you about the price elasticity of demand? What will happen to total revenue as a result of the price increase?arrow_forwardJills Sausage Dog Stand projects the following demand for Jills sausage dogs: a. Calculate the price elasticity of demand between 2 and 4. Is demand in this range elastic or inelastic? b. Calculate the price elasticity of demand between 4 and 6. Is demand in this range elastic or inelastic?arrow_forward
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