6. Examine the following pairs of goods. Which demand is likely to be more elastic? Briefly explain your reasoning. a. Diet Pepsi (one brand) or total soft drinks The Demand of total soft drinks would be more elastic. b. Food purchased at "fast food" cafeterias or food purchased as a fancy (4-star) restaurant The Food c. Tesla model S car or low sodium crackers d. All-inclusive Caribbean Cruise vacations or bicycle tires

6. Examine the following pairs of goods. Which demand is likely to be more elastic? Briefly explain your reasoning. a. Diet Pepsi (one brand) or total soft drinks The Demand of total soft drinks would be more elastic. b. Food purchased at "fast food" cafeterias or food purchased as a fancy (4-star) restaurant The Food c. Tesla model S car or low sodium crackers d. All-inclusive Caribbean Cruise vacations or bicycle tires

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 7PA: Maria has decided always to spend one third of her income on clothing. a. What is her income...

See similar textbooks

Similar questions

Economists define normal goods as having a positive income elasticity. We can divide normal goods into two types: Those whose income elasticity is less than one and those whose income elasticity is greater than one. Think about products that would fall into each category. Can you come up with a name for each category?
Maria has decided always to spend one third of her income on clothing. a. What is her income elasticity of clothing demand? b. What is her price elasticity of clothing demand? c. It Marias tastes change and she decides to spend only one fourth of her income on clothing, how does her demand curve change? What is her income elasticity and price elasticity now?
The equation for a demand curve is P=483Q. What is the elasticity in moving from quantity of 5 to a quantity of 6?
What is the difference between the demand and the quantity demanded of a product, say milk? Explain in words and show the difference on a graph with a demand curve for milk.
Isabella always spends $50 on red roses each month and simply adjusts the quantity she purchases as the price changes. What can you say about Isabella's elasticity of demand for roses?
What is the formula for the income elasticity of demand?
What is the price elasticity of demand? Can you explain it in your own words?