1. As the owner of an ice-cream store, you believe it is necessary to purchase another ice-cream makerto meet the increased demand. You need to take a loan to finance it. The loan officer tells you thatyour revenues of $750,000 are insufficient to support additional debt. To qualify for the loan, yourrevenues need to be $50,000 higher. To generate additional revenue, you collect data on the price (incents) per pound you charge customers and the related quantity of ice-cream consumed per year inpounds. The information is saved in HW3_2.xlsx. Use these data to estimate the log-linear demandspecification to obtain least squares estimated of the demand for ice-cream. Write an equation thatsummarizes the demand for ice cream, and then determine the percentage price increase or decreasethat is needed in order to boost revenues by $50,000. In (Quant In (Price)0.852.380.952.361.042.341.082.331.152.281.182.301.202.231.232.201.302.181.322.121.342.111.362.081.362.111.402.091.382.041.452.051.482.081.482.041.492.041.522.041.562.001.561.991.571.561.561.561.581.591.621.661.651.671.681.691.721.741.751.771.791.821.842.002.112.042.052.001.951.961.951.931.881.851.831.851.781.831.781.811.821.78

A regression equation is an equation that finds out the relationship between the sets of existing…

Answered: 1. As the owner of an ice-cream store,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Problem 06-06 (Algo) According to the Income elasticity formula, Income elasticity of demand = E=% change in quantity demanded + % change in Income. By how much will popcorn sales increase if average Income goes up by 19 percent? (Assume the Income elasticity of popcorn is 3.29.) Instructions: Enter your response as a percentage rounded to one decimal place. percent
Suppose that at a price of $1 per subscription, 100,000 subscriptions are demanded for The Post-Standard (the major daily newspaper servicing the greater Syracuse, New York). But, if the price is raised to $1.1, demand is 70,000 subscriptions. As the head of the analytic team, will you suggest to the editor of Post- Standard that an increase in subscription price will not significantly influence consumer demand? E = |-3|>10Elastic demand (an increase in subscription price will significantly influence consumer demand)
You were promoted as the manager of a new Clean-well Sanitary Store that sells cleaning and sanitation products wholesale. You recently read in an article there that the price of vitamins is expected to increase by 20 percen. How will this affect your store's sales of sanitation products? Items Selexted Cross price elasticity Food supplements 0.34 Medicines 0.56 Foods 0.09
Use the midpoint method to calculate your price elasticity of demand as the price of compact discs increases from $8 to $10 if (i) your income is $10,000, and (ii) your income is $12,000. b. Calculate your income elasticity of demand as your income increases from $10,000 to $12,000 if (i) the price is $12, and (ii) the price is $16.
3. Last month, sellers of Good F sold 400 units and collected revenue of $8,000. This month sellers of Good F raised their price, sold 375 units and received $9,000 of revenue. At the same time, the price of Good G stayed the same, but sales of Good G fell from 210 units to 190 units. We can conclude that Goods F and G are substitutes, and have a cross-price elasticity of 0.55. are substitutes, and have a cross-price elasticity of 1.82. are complements, and have a cross-price elasticity of 1.82. are complements, and have a cross-price elasticity of negative 1.82. are complements, and have a cross-price elasticity of negative 0.55. A BCDE
Question#6 Quantities PurchasedQuantities Purchased IncomePricesGood XGood Y $30,000Px = $6, Py = $3220 50,000Px = $6, Py = $4510 Refer to Table.Using the information in the table, calculate the income elasticity of demand for good X and characterize the good. Use the midpoint formula. Can you calculate the income elasticity of demand for good Y? If you can, show your calculation and characterize the good. If you cannot, explain why.
Imagine your income increases and you find that you buy more coffee. What is true about your income elasticity of demand (Ei) and how you perceive coffee? Ei > 0 and you view coffee as an inferior good Ei > 0 and you view coffee as a normal good Ei < 0 and you view coffee as an inferior good Ei < 0 and you view coffee as a normal good
Q7
How does a sudden decrease in consumer confidence due to a significant political event impact the demand for luxury goods in an economy?
An individual spends all his income on three goods. He buys 550 units of X at $1 per unit, 425 units of Y at $2 per unit and 200 units of Z at $ 3 per unit. The price of X increases by 10%, but there is no change in prices of Y and Z. He now buys 440 units of Y and 190 units of Z. Calculate his price elasticity of demand for X.
Elasticity: Measuring Responsiveness End of Chapter Problem You may have observed that items such as different brands of aspirin, tomato sauce, or gasoline are typically priced the same as each other. This is particularly true when consumers can find these goods in close proximity to each other. For example, prices are often the same at gas stations that are on opposite sides of the street. Prices are also generally the same for products next to each other on the same grocery store shelf. - The aforementioned examples are goods that are likely to be price elasticity to be You would expect the value of the cross- because the opportunity cost of getting information on price is low.
B. Calculate the price elasticity of demand for large drinks. (Show your work) Last month= $6.00 with 150 quantity This month= $5.50 with 161 quantity Elasticity of demand = Q2-Q1 161/150 divided by (Q1+02) 150+161=311 divided by 2 = 155.5

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