A survey taken by residents from the imaginary town of Draw City tells economists that the following changes result from a 17% rise in income: • A 30% increase in the quantity of queens demanded • A 13% decrease in the quantity of kings demanded • A 12% increase in the quantity of cheques demanded Compute the income elasticity of demand for each good and use the dropdown menus to complete the first column in the following table. Then, based on the income elasticities, classify each good as either a normal good or an inferior good. (Hint: Be careful to keep track of the direction of change. The sign of the income elasticity of demand can be positive or negative, and the sign gives important information. Good Income Elasticity of Demand Normal Good or Inferior Good Queens Kings Cheques Which of the following three goods is most likely to be classified as a luxury good ? Kings Queens Cheques

Does this imply that ice cream and frozen yogurt are complements or substitutes and does that answer match your intuition for whether or not ice cream and frozen yogurt are complements or substitutes? If not, how can you account for the value of the cross price elasticity implied by the data?

Question #1: On the news there has been outrage over the price of Epipens, a medication needed for allergic reactions to food and bee stings. The price of a two-pack of Epipens has risen from $100 to $600. The number of Epipens purchased fell from 1000 to 400. At the current time, there are no substitutes for this drug Will this increase in price cause a decrease in demand or a decrease in quantity demanded? Illustrate your answer graphically (either by showing a movement along the demand curve or by shifting the demand curve).

Imagine that the table shows the quantity demanded of UGG boots at five different prices in 2021 and in 2022. Which of the following variables could cause the demand for UGG boots to change as indicated from 2021 to 2022? (Check all that apply.) A. The expectation that UGG boots will fall in price. B. A decrease in the price of UGG boots. C. An increase in the number of buyers. D. A decrease in the price of a complementary good. A Price $160 170 180 190 200 Quantity Demanded 2021 8,000 7.500 7,000 6,500 6,000 Quantity Demanded 2022 9,000 8,500 8,000 7,500 7,000

Assume that you work in a movie theater and you want to increase revenue at the theater after the pandemic. The pandemic has caused people to find many activities that are alternatives to going to the movie theater. Fill in the blanks below with the words that best complete the sentences: Because consumers have found more substitutes for going to the movie theater, price elasticity of demand for movie tickets is more likely to be        [ elastic or inelastic ]. Because of this price elasticity of demand, you should                           [increase or decrease]  the price of movie tickets if you want to increase revenue.

Suppose that, in an attempt to entice citizens to conserve energy, the government enacted regulations requiring that all air conditioners be more efficient in their use of electricity. After this regulation was implemented, government officials were then surprised to discover that people used even more electricity than before.  Using the concept of price elasticity, which of the following statements best explains how this increase might have occurred? multiple choice Because the regulation effectively reduced the price of cool air, consumers with sufficiently elastic demand might have bought substantially more of it. There is no way the observed change could have occurred if all consumers were fully informed, self-interested, and rational. The government ignored the possibility that the demand curve for electricity might be upward sloping. In practice, people often pay little attention to the relevant costs and benefits when deciding how much of a good, like electricity,…

Consider two markets: the market for cat food and the market for dog food. The initial equilibrium for both markets is the same, the equilibrium price is $⁢3.50, and the equilibrium quantity is 31.0. When the price is $10.75, the quantity supplied of cat food is 75.0 and the quantity supplied of dog food is 103.0. For simplicity of analysis, the demand for both goods is the same. Using the midpoint formula, calculate the elasticity of supply for dog food. Please round to two decimal places.

In the graph on the right, the demand for syrup has changed because the price of frozen waffles has risen from $3.00 to $3.50 per package. The cross-price elasticity of demand between frozen waffles and syrup is. (Use the midpoint formula and enter your response rounded to two decimal places. Be sure to include the minus sign if necessary.) syrup) Price (dollars per package 4.00- 3.75- 3.50- 3.25- 3.00- 2.75- 2.50- 2.25- 2.00-1.89 1.75+ 1.50- 1.25- 1.00- 0.75- 0.50 0.25- 0.00+ 0 Syrup S D₁ D₂ 6,000 7,0009,000 3,000 6,000 9,000 12,000 15,000 Quantity (packages of syrup per week)