Suppose consumers buy 60 million packs of cigarettes per month at a price of $5 per pack. If a $2 tax is added to that price, Instructions: Enter your responses as a percentage rounded to one decimal place. a. By what percentage does the price change? percent
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- 1. The manager of a fleet of cars currently rents them out at the market price of $49 per day,with renters paying for their own gasoline and oil. In a front-page newspaper article, themanager learns that economists expect gasoline prices to rise dramatically over the nextyear, due to increased tensions in the Middle East. What should she expect to happen to theprice of the cars her company rents?Consider the market for chicken burger. For each of the events listed here, identify whichof the determinants of demand or supply are affected. Also indicate whether demand orsupply increases or decreases. Then draw a diagram to show the effect on the equilibriumprice and equilibrium quantity of chicken burger.a. Nowadays grade IX-XII students throughout the country thinks that chicken burger is the mostconvenient meal for lunch time in schoolb. Price of chicken meat is now higherc. People expect 10% discount on chicken burger in December as a Christmas offerd. Price of hotdog fallse. A stock market crash lowers people’s wealth [Consider chicken burger is inferior good for e)]Suppose the income elasticity of demand for food is 0.5 and the price casticity of demand -1.0. Suppose also that your housemate Claire spends $10,000 per year on food, that the price of food is $4, and that her Acome is $50,000. a) If a S4 sales tax on food were to cause the price of food to double, how much food woukl Claire's consume? b) Suppose she is given a state sales tax rebate of $5,000 to case the effect of the tax." Now how much food would she-cat? c) Briefly discuss how you know whether she would be better or worse off when given a rebate to the sales tax payments?
- The New York Times reported (Feb. 17, 1996) thatsubway ridership declined after a fare increase:“There were nearly four million fewer riders inDecember 1995, the first full month after the priceof a token increased 25 cents to $1.50, than in theprevious December, a 4.3 percent decline.”a. Use these data to estimate the price elasticity ofdemand for subway rides.b. According to your estimate, what happensto the Transit Authority’s revenue when thefare rises?c. Why might your estimate of the elasticity beunreliable?nwob wobanog ovio brsmab art loded Jebey vlasue bee bnemobt ws iw dnove wod C. Draw the market for Hunt's Ketchup. There is a decrease in the price of tomatoes used by Hunt's and at the same time the price of Heinz Ketchup increases. Assume that Heinz Ketchup and Hunt's Ketchup are substitutes. ud to eahIn the regional market for housing, demand for single detached homes depends on the price of the house, P. consumer income. N. and the price of a related good, townihouses, Pr. The demand equation is Qaa "0.3N+ 008P, -0.02PM Initally, average consumer income is N $60.000 and the average price of townhouses is $310,000. Making these subathusions, we get Qa "42,800 -0.02P This is our current demand equation. Suppose N 60,000 and PH= 255,000. the prioe of townhouses decreases from $310.000 to $280,00, what is the cross-price elasticity of demand for housing Cick the koon to view the derivation of the curent demand equation. The cross erice elanichy of demand for housing when N00.000, P, 256,000, and the price of fownhouses decreases trom S310.000 to SZ0.000 is This is Single detached homes and townhouses are (Round to two decimal places as needed)
- The equation for a demand curve is P = 2/Q. What is the elasticity of demand as price falls from 5 to 4? Whatistheelasticityofdemandasthepricefallsfrom9 to 8? Would you expect these answers to be the same?When someone’s kidneys fail, the person needs tohave medical treatment with a dialysis machine (unlessor until they receive a kidney transplant) or they will die.Sketch a supply and demand diagram, paying attentionto the appropriate elasticities, to illustrate that the supplyof such dialysis machines will primarily determine theprice.Hi may explain to me how to solve the question step by step? TQ Sally Henin has a price elasticity of demand for gasoline of -0.8. Her income elasticity for gasoline is 0.5. Sally's current income is $40,000 per year. Sally currently spends $800 per year on gasoline. The price of gasoline is currently $1.00 per gallon. a. A contemplated excise tax on gasoline will cause the price of gasoline to rise to $1.40. What impact will the tax have on Sally's consumption of gasoline? b. Since the purpose of the tax is only to discourage gasoline consumption, Congress is considering a $200 income tax rebate to lessen the burden of the gasoline tax. What impact will the rebates have on Sally's consumption of gasoline? 3. Assume that both the tax and rebate are implemented. Will Sally be worse off or better off?
- Q.A person sells 50 units of apple at price $1. What will be the total revenue when price thcrease to $2 and quantity remains constant.24. Demand means : a the various quantities of a good/service that a consumer will take okt prom market at ott alternative prices , hol ding ather factors constant. B. It defines the behavior giwen the price of a good. cam ceterix paribus. the comsumer , C. Only A is correct D. Bath A and B are correct.Supply and Demand The table below gives thequantity of graphing calculators demanded and thequantity supplied for selected prices.a. Find the linear equation that gives the price as afunction of the quantity demanded.b. Find the linear equation that gives the price as afunction of the quantity supplied.c. Use these equations to find the market equilibriumprice.
