EBK MICROECONOMICS
5th Edition
ISBN: 9781118883228
Author: David
Publisher: YUZU
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 2.16P
To determine
Price
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Nadia consumes two goods, food and clothing. The price of food is $2, the price of clothing is $5, and her income is $1,000. She always spends 40% of her income on food regardless of the price of food, clothing, or her income.
What is her price elasticity of demand for food?
What is her cross-price elasticity of demand for food with respect to clothing?
What is her income elasticity of demand for food?
Tracey usually pays a price between $6 and $10 per pound of rice. Her monthly total expenditure on rice increases as the price decreases. What does this implyabout her price elasticity of demand for rice?
Nadia consumes two goods, food and clothing. The price of food is $2,the price of clothing is $5,and her income is $1,000. Nadia always spends 40 percent of her income on food regardless of the price of food, the price of clothing, or her income.What is her price elasticity of demand for food?
Chapter 2 Solutions
EBK MICROECONOMICS
Ch. 2 - Prob. 1RECh. 2 - Prob. 2RECh. 2 - Prob. 3RECh. 2 - Prob. 4RECh. 2 - Prob. 5RECh. 2 - Prob. 6RECh. 2 - Prob. 7RECh. 2 - Prob. 8RECh. 2 - Prob. 9RECh. 2 - Prob. 10RE
Ch. 2 - Prob. 2.1PCh. 2 - Prob. 2.2PCh. 2 - Prob. 2.3PCh. 2 - Prob. 2.4PCh. 2 - Prob. 2.5PCh. 2 - Prob. 2.6PCh. 2 - Prob. 2.7PCh. 2 - Prob. 2.8PCh. 2 - Prob. 2.9PCh. 2 - Prob. 2.10PCh. 2 - Prob. 2.11PCh. 2 - Prob. 2.12PCh. 2 - Prob. 2.13PCh. 2 - Prob. 2.14PCh. 2 - Prob. 2.15PCh. 2 - Prob. 2.16PCh. 2 - Prob. 2.17PCh. 2 - Prob. 2.18PCh. 2 - Prob. 2.19PCh. 2 - Prob. 2.20PCh. 2 - Prob. 2.21PCh. 2 - Prob. 2.22PCh. 2 - Prob. 2.23PCh. 2 - Prob. 2.24PCh. 2 - Prob. 2.25PCh. 2 - Prob. 2.26PCh. 2 - Prob. 2.27PCh. 2 - Prob. 2.28PCh. 2 - Prob. 2.29PCh. 2 - Prob. 2.30P
Knowledge Booster
Similar questions
- Estimates presented in Exhibit 5 show that Android users have a higher price elasticity of demand for apps in the Google Play Store than do iPhone users in the Apple App Store. Why might Android users tend to be more sensitive to app prices than iPhone users? What categories or types of apps (for example, games/social media) do you think have the highest price elasticities?arrow_forwardDescribe your experience with price elasticity as a consumer. Provide an example of an inelastic good and an elastic good for your household. What makes those goods elastic or inelastic? How might other households respond differently?arrow_forwardSally 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 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? 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? Assume that both the tax and rebate are implemented. Will Sally be worse off or better off?arrow_forward
- 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-explain your reasoning for each categorization.arrow_forwardDaria's income decreases from £80,000 to £54,000 per year. As a result, she increased her demand for take-away food by 30 percent and decreased her demand for new clothes by 20 percent. a) Calculate Daria's income elasticity of demand for (i) take-away food and (ii) new clothes. b) Comment on the nature of both items. In a newspaper article you read that the price for shirts increased by 23% and the demand for pullovers rose by 9%. c) State the type of elasticity you can calculate. Calculate the elasticity and discuss the economic intuition of your result. d) The newspaper looked at historical data and noticed that the elasticity calculated in part (c) increases. What does this imply for the relationship between shirts and pullovers?arrow_forwardMaria has decided always to spend one-third of her income on clothing. What is her income elasticity of clothing demand? What is her price elasticity of clothing demand? If Maria’s 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?arrow_forward
- Jonathan's income falls by 15%. He decides to cut down his purchases of high-end restaurant meals by 20%. His income elasticity of demand for high-end restaurant meals is and meals at high-end restaurants are a good for Jonathan.arrow_forwardBecky only eats out at Macaroni Grill and eats out three times per month. She receives a raise from $33,200 to $33,500 and decides to eat out five times per month. Use the midpoint method to calculate the monthly income elasticity of demand for eating out. Round your answer to two decimal places. income elasticity of demand: This good is an inferior good. a luxury good. a normal good.arrow_forwardImagine your income increases and you find that you buy more coffee. What is true about your income elasticity of demand (Ei) and how you perceive coffee? Ei > 0 and you view coffee as an inferior good Ei > 0 and you view coffee as a normal good Ei < 0 and you view coffee as an inferior good Ei < 0 and you view coffee as a normal goodarrow_forward
- Jenny's weekly income increases from $500 to $650. As a result, she goes out for dinner one day a week instead of one day every other week. What is Jenny's income elasticity of demand for restaurant dinners?arrow_forwardMelanie really enjoys using her old-school charcoal grill to cook steaks, but she has found that due to environmental regulations, charcoal prices have gone up 50%. What is her price elasticity of demand for the rest of this month going to be compared to what it will be in the spring? Please explain why.arrow_forwardThe income elasticity of demand for food is roughly 1. Suppose a consumer's monthly income is $2,000, of which 20 percent is spent on food. If the income of this consumer doubles, the amount she'll spend on food will be Multiple Choice $400 per month. $500 per month. $800 per month. $1,000 per month.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning