Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Chapter 4, Problem 15APA
(a)
To determine
Price
(b)
To determine
Changes in expenditure on banana.
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Your price elasticity of demand for bananas is 4. If the price of bananas rises by 5
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Your price elasticity of demand for bananas is 4. If the price of bananas rises by 5 %, what is the percentage change in the quantity of bananas you buy?
5.Your price elasticity of demand for bananas is 4. If the price of bananas rises by 5 percent, what is :
a-The percentage change in the quantity of bananas you buy?
b-The change in your expenditure on bananas?
Chapter 4 Solutions
Macroeconomics
Ch. 4.1 - Prob. 1RQCh. 4.1 - Prob. 2RQCh. 4.1 - What makes the demand for some goods elastic and...Ch. 4.1 - Prob. 4RQCh. 4.1 - Prob. 5RQCh. 4.2 - Prob. 1RQCh. 4.2 - Prob. 2RQCh. 4.2 - What does the cross elasticity of demand measure?Ch. 4.2 - Prob. 4RQCh. 4.3 - Prob. 1RQ
Ch. 4.3 - Prob. 2RQCh. 4.3 - Prob. 3RQCh. 4.3 - Provide examples of goods or services whose...Ch. 4.3 - Prob. 5RQCh. 4 - Rain spoils the strawberry crop, the price rises...Ch. 4 - Prob. 2SPACh. 4 - Prob. 3SPACh. 4 - Prob. 4SPACh. 4 - Prob. 5SPACh. 4 - Prob. 6SPACh. 4 - Prob. 7SPACh. 4 - Prob. 8SPACh. 4 - The table sets out the supply schedule of jeans....Ch. 4 - Prob. 10APACh. 4 - The figure shows the demand for DVD rentals. a....Ch. 4 - Prob. 12APACh. 4 - Prob. 13APACh. 4 - Prob. 14APACh. 4 - Prob. 15APACh. 4 - Prob. 16APACh. 4 - Prob. 17APACh. 4 - Prob. 18APACh. 4 - When Alexs income was 3,000, he bought 4 bagels...Ch. 4 - Prob. 20APACh. 4 - Prob. 21APACh. 4 - Prob. 22APACh. 4 - The table sets out the supply schedule of...Ch. 4 - Prob. 24APACh. 4 - Prob. 25APACh. 4 - Prob. 26APACh. 4 - Prob. 27APA
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- Choose a product which you are familiar with. Using the internet for research (please cite your source), what is the price elasticity of demand for this product or group of products? What does that mean with respect to a 10% increase in the price of this good? What happens to quantity demanded? Which of the 4 determinants of price elasticity of demand do you believe drives this outcome about the good's price elasticity? If there is more than one determining factor, please explain your reasoning. [for many goods, all of the 4 determinants come into play - I just want you to choose the one or two that you believe are most relevant).arrow_forwardMr. Ali was buying 10 kg of sugar when the price of one kg was Rs 100. Now the price has come down to Rs 75 and he is buying 15 kg of sugar. Find the point elasticityarrow_forward1. Work out the Price Elasticity of Demand for each, and comment on your result. a) The price of a smartphone is currently £200, and the quantity demanded is 4m. Next year the price falls to £180 and the quantity demanded rises to 6m. b) The price of pens today is £1, and the quantity demanded is 1m. Next year the price rises to £1.10 and the quantity demanded falls to 950,000. c) The price of a daily newspaper today is £1.50p, and the quantity demanded is 2m. Next year the price falls by 30p and the quantity demanded rises to 2.2marrow_forward
- Suppose bad weather decreases the wheat harvest by 12 percent. If the price elasticity of demand for wheat is 0.6, how would the crop failure affect the price of wheat? Would the crop failure benefit or harm wheat farmers?arrow_forwardA rise in the price of a crate of Pepsi from USD 20 to USD 30 results in a fall in the quantity of crate of Pepsi demanded from 220 million to 180 million a day and at today’s price of a Coca-Cola, USD 15, the quantity of Coca-Cola demanded increases from 80 million to 100 million a day. Kindly Answer ONLY (d) a). Calculate the percentage change in the price of a crate of Pepsi and the percentage change in the quantity demanded of Pepsi. Use the average price and average quantity.b). Calculate the price elasticity of demand for Pepsi. c). Is the demand for Pepsi elastic or inelastic? Explain please d). Calculate and explain the cross elasticity of demand for Coca-cola with respect to the price of a Pepsi.arrow_forward1. The price elasticity of demand for beef is estimated to be 0.60 (in absolute value). There is a 20 percent increase in the price of beef, holding everything else constant, how much will the quantity of beef demanded decrease? Show your work. 2. Given the elasticity, is the demand for beef elastic or inelastic? Explain.arrow_forward
- A rise in the price of a crate of Pepsi from USD 20 to USD 30 results in a fall in the quantity of crate of Pepsi demanded from 220 million to 180 million a day and at today’s price of a Coca-Cola, USD 15, the quantity of Coca-Cola demanded increases from 80 million to 100 million a day. a). Calculate the percentage change in the price of a crate of Pepsi and the percentage change in the quantity demanded of Pepsi. Use the average price and average quantity. b). Calculate the price elasticity of demand for Pepsi. c). Is the demand for Pepsi elastic or inelastic? Explain please d). Calculate and explain the cross elasticity of demand for Coca-cola with respect to the price of a Pepsi.arrow_forwardDraw a supply and demand curve for cheeseburgers. Cattle farmers created a supplement to give to their cows that make them grow twice as large, what happens to the supply or demand of cheeseburgers? Why?arrow_forwardCalculate the elasticity of the beans.arrow_forward
- Question 5 a. Using the table below which outlines the price and quantity demanded of three goods, calculate the following: P1 2.50 Q1 30 Q2 65 P2 Lobster 1.45 Cereal 9.00 12.00 40 25 Orange Juice i. The price elasticity of demand for lobster ii. The cross-price elasticity of cereal with respect to orange juice 4.45 6.75 150 125 b. Transport operators in Belize received permission to increase their fares 15 percent, and they anticipated that revenues would increase by about 15 percent. When the 15 percent increase was enacted revenues increased by only about 5 percent. What can you infer about the elasticity of demand for transportation? What were operators assuming about the elasticity of demand?arrow_forward2. How can you use price elasticity to determine what the quantity demanded for gasoline right now with gasoline prices above $2. How do you determine quantity demanded of gasoline cars in the long-term due to high gasoline prices, and will we eventually switch to electric cars in the long-term?arrow_forwardSuppose the cross-price elasticity of tea with respect to the price of coffee is 0.6, and the price of coffee falls by 5%. What will happen to the demand for tea? Show your work.arrow_forward
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