The price inelasticity of demand.

Question

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Answer 1

Question

Chapter 5, Problem 1FT

Subpart (a):

To determine

The price inelasticity of demand.

Subpart (a):

Expert Solution

Explanation of Solution

Fruit is more likely to be in-elastically demanding. This is because fruit as a whole has fewer substitutes than any other item in the category of the fruits.

Economics Concept Introduction

Concept Introduction:

Price elasticity of demand: The price elasticity of demand is the responsiveness of the quantity demanded to a change in the price measured by dividing the percentage change in the quantity demanded of a product by the percentage change in the price of the product.

Subpart (b):

To determine

The price inelasticity of demand.

Subpart (b):

Expert Solution

Explanation of Solution

Since the people are relatively inelastic or inflexible in a short run, demand for beef over the next month is more inelastic.

Subpart (c):

To determine

The price inelasticity of demand.

Subpart (c):

Expert Solution

Explanation of Solution

The demand for the gasoline in the entire city is more in-elastically demanding. This is because branded goods are more elastic than other categories. This implies very good substitutes for Exxon gasoline, which may be available at close distances whereas fewer substitutes may be available for the category of gasoline.

Subpart (d):

To determine

The price inelasticity of demand.

Subpart (d):

Expert Solution

Explanation of Solution

Insulin is more a necessity good for the buyers of insulin. This implies the demand for insulin from buyers is more inelastic than the demand for vitamins for the buyers of vitamins.

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1. The IS/MP model assumes that the Fed sets the real interest rate at a given level Rt. Suppose the Fed adopts a monetary policy rule that instructs it how to change the real interest rate in response to short-run output. Let's call this a monetary policy rule (MPR): The parameter x is positive. Rt=+xY a) Redraw the IS/MP diagram replacing the MP curve with the MPR curve. Show how an aggregate demand shock affects output and interest rates in the short run. Use the IS and MPR equations to solve for the changes in output and the real interest rate. b) How does the change in a affect investment in the IS/MPR model? Explain how a tax cut affects short-run output and investment in this version of the short-run model. The effect on investment is called crowding out. c) Add the Phillips curve to complete the short-run model. Illustrate how the Fed's choice of large it makes reveals its trade off between inflation and output in the short run.

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Answer 2

Question

Chapter 5, Problem 1FT

Subpart (a):

To determine

The price inelasticity of demand.

Subpart (a):

Expert Solution

Explanation of Solution

Fruit is more likely to be in-elastically demanding. This is because fruit as a whole has fewer substitutes than any other item in the category of the fruits.

Economics Concept Introduction

Concept Introduction:

Price elasticity of demand: The price elasticity of demand is the responsiveness of the quantity demanded to a change in the price measured by dividing the percentage change in the quantity demanded of a product by the percentage change in the price of the product.

Subpart (b):

To determine

The price inelasticity of demand.

Subpart (b):

Expert Solution

Explanation of Solution

Since the people are relatively inelastic or inflexible in a short run, demand for beef over the next month is more inelastic.

Subpart (c):

To determine

The price inelasticity of demand.

Subpart (c):

Expert Solution

Explanation of Solution

The demand for the gasoline in the entire city is more in-elastically demanding. This is because branded goods are more elastic than other categories. This implies very good substitutes for Exxon gasoline, which may be available at close distances whereas fewer substitutes may be available for the category of gasoline.

Subpart (d):

To determine

The price inelasticity of demand.

Subpart (d):

Expert Solution

Explanation of Solution

Insulin is more a necessity good for the buyers of insulin. This implies the demand for insulin from buyers is more inelastic than the demand for vitamins for the buyers of vitamins.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 5, Problem 1FT

Subpart (a):

To determine

The price inelasticity of demand.

Subpart (a):

Expert Solution

Explanation of Solution

Fruit is more likely to be in-elastically demanding. This is because fruit as a whole has fewer substitutes than any other item in the category of the fruits.

Economics Concept Introduction

Concept Introduction:

Price elasticity of demand: The price elasticity of demand is the responsiveness of the quantity demanded to a change in the price measured by dividing the percentage change in the quantity demanded of a product by the percentage change in the price of the product.

Subpart (b):

To determine

The price inelasticity of demand.

Subpart (b):

Expert Solution

Explanation of Solution

Since the people are relatively inelastic or inflexible in a short run, demand for beef over the next month is more inelastic.

Subpart (c):

To determine

The price inelasticity of demand.

Subpart (c):

Expert Solution

Explanation of Solution

The demand for the gasoline in the entire city is more in-elastically demanding. This is because branded goods are more elastic than other categories. This implies very good substitutes for Exxon gasoline, which may be available at close distances whereas fewer substitutes may be available for the category of gasoline.

Subpart (d):

To determine

The price inelasticity of demand.

Subpart (d):

Expert Solution

Explanation of Solution

Insulin is more a necessity good for the buyers of insulin. This implies the demand for insulin from buyers is more inelastic than the demand for vitamins for the buyers of vitamins.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 5, Problem 1FT

Subpart (a):

To determine

The price inelasticity of demand.

Subpart (a):

Expert Solution

Explanation of Solution

Fruit is more likely to be in-elastically demanding. This is because fruit as a whole has fewer substitutes than any other item in the category of the fruits.

Economics Concept Introduction

Concept Introduction:

Price elasticity of demand: The price elasticity of demand is the responsiveness of the quantity demanded to a change in the price measured by dividing the percentage change in the quantity demanded of a product by the percentage change in the price of the product.

Subpart (b):

To determine

The price inelasticity of demand.

Subpart (b):

Expert Solution

Explanation of Solution

Since the people are relatively inelastic or inflexible in a short run, demand for beef over the next month is more inelastic.

Subpart (c):

To determine

The price inelasticity of demand.

Subpart (c):

Expert Solution

Explanation of Solution

The demand for the gasoline in the entire city is more in-elastically demanding. This is because branded goods are more elastic than other categories. This implies very good substitutes for Exxon gasoline, which may be available at close distances whereas fewer substitutes may be available for the category of gasoline.

Subpart (d):

To determine

The price inelasticity of demand.

Subpart (d):

Expert Solution

Explanation of Solution

Insulin is more a necessity good for the buyers of insulin. This implies the demand for insulin from buyers is more inelastic than the demand for vitamins for the buyers of vitamins.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 5, Problem 1FT

Subpart (a):

To determine

The price inelasticity of demand.

Subpart (a):

Expert Solution

Explanation of Solution

Fruit is more likely to be in-elastically demanding. This is because fruit as a whole has fewer substitutes than any other item in the category of the fruits.

Economics Concept Introduction

Concept Introduction:

Price elasticity of demand: The price elasticity of demand is the responsiveness of the quantity demanded to a change in the price measured by dividing the percentage change in the quantity demanded of a product by the percentage change in the price of the product.

Subpart (b):

To determine

The price inelasticity of demand.

Subpart (b):

Expert Solution

Explanation of Solution

Since the people are relatively inelastic or inflexible in a short run, demand for beef over the next month is more inelastic.

Subpart (c):

To determine

The price inelasticity of demand.

Subpart (c):

Expert Solution

Explanation of Solution

The demand for the gasoline in the entire city is more in-elastically demanding. This is because branded goods are more elastic than other categories. This implies very good substitutes for Exxon gasoline, which may be available at close distances whereas fewer substitutes may be available for the category of gasoline.

Subpart (d):

To determine

The price inelasticity of demand.

Subpart (d):

Expert Solution

Explanation of Solution

Insulin is more a necessity good for the buyers of insulin. This implies the demand for insulin from buyers is more inelastic than the demand for vitamins for the buyers of vitamins.

Answer 6

Chapter 5, Problem 1FT

Subpart (a):

To determine

The price inelasticity of demand.

Subpart (a):

Expert Solution

Explanation of Solution

Fruit is more likely to be in-elastically demanding. This is because fruit as a whole has fewer substitutes than any other item in the category of the fruits.

Economics Concept Introduction

Concept Introduction:

Price elasticity of demand: The price elasticity of demand is the responsiveness of the quantity demanded to a change in the price measured by dividing the percentage change in the quantity demanded of a product by the percentage change in the price of the product.

Answer 7

Chapter 5, Problem 1FT

Subpart (a):

To determine

The price inelasticity of demand.

Answer 8

Subpart (a):

Expert Solution

Explanation of Solution

Fruit is more likely to be in-elastically demanding. This is because fruit as a whole has fewer substitutes than any other item in the category of the fruits.

Answer 9

Subpart (a):

Expert Solution

Answer 10

Subpart (a):

Expert Solution

Answer 11

Expert Solution

Answer 12

Economics Concept Introduction

Concept Introduction:

Price elasticity of demand: The price elasticity of demand is the responsiveness of the quantity demanded to a change in the price measured by dividing the percentage change in the quantity demanded of a product by the percentage change in the price of the product.

Answer 13

Subpart (b):

To determine

The price inelasticity of demand.

Subpart (b):

Expert Solution

Explanation of Solution

Since the people are relatively inelastic or inflexible in a short run, demand for beef over the next month is more inelastic.

Answer 14

Subpart (b):

To determine

The price inelasticity of demand.

Answer 15

Subpart (b):

Expert Solution

Explanation of Solution

Since the people are relatively inelastic or inflexible in a short run, demand for beef over the next month is more inelastic.

Answer 16

Subpart (b):

Expert Solution

Answer 17

Subpart (b):

Expert Solution

Answer 18

Expert Solution

Answer 19

Subpart (c):

To determine

The price inelasticity of demand.

Subpart (c):

Expert Solution

Explanation of Solution

The demand for the gasoline in the entire city is more in-elastically demanding. This is because branded goods are more elastic than other categories. This implies very good substitutes for Exxon gasoline, which may be available at close distances whereas fewer substitutes may be available for the category of gasoline.

Answer 20

Subpart (c):

To determine

The price inelasticity of demand.

Answer 21

Subpart (c):

Expert Solution

Explanation of Solution

The demand for the gasoline in the entire city is more in-elastically demanding. This is because branded goods are more elastic than other categories. This implies very good substitutes for Exxon gasoline, which may be available at close distances whereas fewer substitutes may be available for the category of gasoline.

Answer 22

Subpart (c):

Expert Solution

Answer 23

Subpart (c):

Expert Solution

Answer 24

Expert Solution

Answer 25

Subpart (d):

To determine

The price inelasticity of demand.

Subpart (d):

Expert Solution

Explanation of Solution

Insulin is more a necessity good for the buyers of insulin. This implies the demand for insulin from buyers is more inelastic than the demand for vitamins for the buyers of vitamins.

Answer 26

Subpart (d):

To determine

The price inelasticity of demand.

Answer 27

Subpart (d):

Expert Solution

Explanation of Solution

Insulin is more a necessity good for the buyers of insulin. This implies the demand for insulin from buyers is more inelastic than the demand for vitamins for the buyers of vitamins.