T4

Explain the likely impact of COVID-19 on income elasticity of demand.

The demand for a commodity generally decreases as the price is raised. Suppose that the demand for oil (per capita per year) is D(p)=1000//p barreis, where p is the price per barrel in dollars. Find the demand when p=55. Estimate the decrease in demand if p rises to 56 and the increase in demand if p is decreased to 54. The demand D(55)= The decrease in demand =? barrels. The increase in demand =? barrels.

PRICE (Delars per tor 18 24 M 4 12 24 QUANTITY (Thousands of tons) Supply Demand O Total Revenue (Thousands of Dollars) Demand Supply Several growers are happy with this advancement in technology because now they can sell more crops, which they believe will lead to increases in revenue. Using elasticities, you will be able to determine whether this price change will lead to a rise or fall in total revenue in this market. Using the midpoint method, the price elasticity of demand for pistachios between the price levels of $15 and 59 per ton is 0.33, meaning that between these two points, demand is inelastic. Thus, you can conclude that the grower's claim is incorrect because total revenue will increase due to the technological improvement. Confirm your previous conclusion by calculating total revenue in the pistachio market before and after the technological improvement. Enter these values in the following table. Before Technological Improvement After Technological Improvement

2- Demand for a product is estimated to be Q = 12000 - 9P +.004Y + .00012A where, Q and P are the quantity and price of the product respectively, Y is income, and A is the advertising expenditures. All the estimated coefficients are statistically significant. The average annual sale and the average price of the product are 60000 units and $8000 respectively. The firm's average annual spending on advertising is $2000000. The GDP in the economy is 24000000. A. Price elasticity of demand is demand is income elasticity of demand is B. What is the optimum level of advertising spending for the firm? ? --? -----, advertising elasticity of What would you advise the firm

-0.03 The short-term demand for crude oil in Country A in 2008 can be approximated by q = f(p) = 2,000,569p where p represents the price of crude oil in dollars per barrel a represents the per capita consumption of crude oil. Calculate and interpret the elasticity of demand when the price is $76 per barrel. The elasticity of demand for oil is. (Type an integer or a decimal.) What is the elasticity of demand for oil when the the price is $76 per barrel? 1 (Type an integer or a decimal.) Interpret the elasticity of demand. Choose the correct answer below. O A. The demand is elastic, so as price increases, revenue decreases. O B. The demand is elastic, so as price increases, revenue increases. OC. The demand is inelastic, so as price increases, revenue increases. OD. The demand is inelastic, so as price increases, revenue decreases.

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Please calculate the total cost of providing a 50% subsidy on purchases of fruit and vegetables at farmers markets by SNAP participants. Assume that you are estimating it for the state of Connecticut with 350,000 SNAP participants. The season for farmers markets and the use of subsidies is 5 months (May-September); subsidies can only be used during this period. Based on prior studies, you know that a typical SNAP participant that attends farmers markets will purchase on average 3 lb of fruit and 2 lb of vegetables per month. Average price for vegetables is $1.5 per lb and the price elasticity of demand for vegetables among SNAP participants is -0.6. Similarly, fruit cost on average $2.5 per lb and the demand elasticity for fruit is -0.8. How much should the state of Connecticut expect to pay in total subsidies each season if only 20% of SNAP participants will attend farmers markets?

Q2-11 Which of the following situations would represent a "small-country" case in the analysis of the elasticities approach to devaluation? Select one: a. demand for exports curve has normal downward slope, supply of imports curve is horizontal b. supply curve of imports has normal upward slope, demand curve for exports is horizontal c. supply curve of imports is horizontal, demand curve for exports is vertical d. demand curve for exports is horizontal, supply curve of imports is vertical

5a