Manning Inc. is the leading manufacturer of garage doors. Demand for residential garage doors depends, of course, on the rate at which new houses are being built, which in turn depends on changes in income per capita. During the past year, Manning sold 10 000 garage doors at an average price of R1 500 per door. In the coming year, disposable income per capita is expected to increase from R32 000 to R34 000. Without any price change, Manning expects current-year sales to rise to 12 000 units. 1. Calculate the arc income elasticity of demand. 2. The company economist estimates that in conjunction with the change in income, if the price of doors is increased by R100, they could sell 11 500 doors. What is the arc price elasticity and what would be the company’s revenue? 3. Should they raise the price even more?

An estimate of the demand function for household furniture produced the following results: F = 0.0036 Y1.35 R0.19 P(-0.48) where F = furniture expenditures per household Y = disposable personal income per household R = value of private residential construction per household P = ratio of the furniture price index to the consumer price index The point price elasticity for household furniture is -0.48 T² = 0.996 and the income elasticity is ▼ According to the estimated model, a 10 percent increase in the value of private residential construction per household demanded by percent. the quantity

Crispies Inc., a player in the breakfast cereals market, sold 20,000 boxes of cereal in the first quarter of the year at a price of $5 per box. Market analysis, however, indicated that Crispies could sell 25,000 boxes in the next quarter if it lowered the price by $1 per box. The firm thus reduced the price to $4 in the second quarter to increase sales to 25,000 boxes. However, after this price reduction, the sales revenue of the firm began to decline long before it hit the target of 25,000 boxes. Which of the following, if true, can best explain this outcome? A. There is a surplus of corn in the domestic economy. B. Crispies' cereals have a high content of Butylated Hydroxytoluene, which according to recent media reports causes extreme hyperactivity in children. C. The output in the fast-food industry shrunk by 2.5 percent this year. D. The rate of inflation in the country is low. E. Crispies' per-unit cost of production is lower than $4.

The COVID-19 pandemic has caused an unprecedented increase in savings in many countries around the world.  In the EU, the savings rate of households has jumped from 12.5% to 17%.  In 2008-2009, it had moved from 12.5% to 14% (Dossche and Zlatanos 2020).  Even if the source of 2020 surge in savings is different from the one of 2008, it is obvious that this increase does not result in more investment and growth. QUESTION: 1. With reference to the paradox of thrift discuss the appropriate approach by the government to get the economy out of economic downturn swiftly

We write the change in total revenue with respect to change in price as dTR/dP. What is the correct expression in the right side of the following equation? dTR/dP= A.) Q(1-n) B.) Q(1+n) C.) Q[1-(1/n)] D.) Q[1+(1/n)]

Bell Greenhouses has estimated its monthly demand for potting soil to be the following: N = 400+5X where N is the monthly demand for bags of potting soil and X is the time period in months (March 2016 = 0). Assume this trend factor is expected to remain stable in the foreseeable future. The following table contains the monthly seasonal adjustment factors, which have been estimated using actual sales data from the past five years: Complete the following table by forecasting Bell Greenhouses' demand for potting soil in March, June, August, and December 2017. Adjustment Factor (%) Forecast Month March June August December +2 +15 +10 -12 The following table shows the forecasted and actual potting soil sales by Bell Greenhouses for April in five different years. Year Forecast Actual 2017 465 498 2016 405 417 2015 345 373 2014 285 296 2013 225 245 What seasonal adjustment factor would you recommend be used to forecast in April 2018? O 2.7% O 6.2% O 0.0%

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Assume that Kelly is a life cycle consumer and receives incomes of 20, 30, 45 and 0 in her four period life. What is Kelly's marginal propensity to consume out of her new wealth (AC/AW) in the following situations: [Hint: Let AC be the the change in consumption compared to what she would have done before the inheritance changed her wealth AW]. 19. In period 2 following an unexpected inheritance of 10: (a) 0.25; (b) 0.33; (c) 0.75; (d) 1.0; 20. In period 3 following an expected lump sum payment from her trust fund of 15: (a) 0.33; (b) 0.75; (c) 0.45; (d) 0.50; 21. What is her desired optimal consumption in period 3 with the anticipated trust fund gift of 15: (a) 20; (b) 30; (c) 27.50; (d) 22.50; 22. In what period of her working life (Y > 0) would her marginal propensity to consume out of an unexpected inheritance of 10 be the highest: (a) 1; (b) 2; (c) 3; (d) 4;

An estimate of the demand function for household furniture produced the following results: F = 0.0036 Y¹.08 R0.16 p(-0.48) where F = furniture expenditures per household Y = disposable personal income per household R = value of private residential construction per household P = ratio of the furniture price index to the consumer price index The point price elasticity for household furniture is r² = 0.996 and the income elasticity is According to the estimated model, a 10 percent increase in the value of private residential construction per household demanded by percent. the quantity