Question

Lorena likes to play golf. The number of times per year that she plays depends on both the price of playing a round of golf as well as Lorena's income and the cost of other types of entertainment-in particular, how much It costs to go see a movie instead of playing golf. The three demand schedules in the table below show how many rounds of golf per year Lorena will demand at each price under three different scenarios. In scenario Di Lorena's income is $50,000 per year and movies cost $9 each. In scenario D2, Lorena's Income is also $50,000 per year, but the price of seeing a movie nises to $11. And in scenarto Dz. Lorena's Income goes up to $70,000 per year, while movies cost $11. 03 D1 5 $ 70,000 Scenario Income per year 3 Price of movie ticket S Price of Golf 500 $45 330 D2 0.000 3 5 0.000 ls 11 Quantity Demanded 15 25 40 15 20

Answer 1

120 24 25 26 27 28 29 antity of Pro - Iritange in cal Cross price elasticity - BIG X Pro 1 БРА Qao DOG - Change in quantity of Golf 10 APM = change in price of Movie tickets 1 PMO - Initial price of movie ticket "QG. Initial quantity demanded of golf 12 At $60 = 10-15 x 9 = 2 x 2 = (-) 1.5 "At $453) = 15-35-xos --Toxos -6 1.8 At $30 - 20-40 X 9 - - 20 x 10 = -) 2.25 No the cross price elasticity ú not same at all three price, infact it is increasing The movies and golf are substitute goods . 11- 9 40 or t odo and

(6) Income elasticity of Demand (using Mid-point) In t to AOG I - A86 x 216 AI Got G, AQG = Change in quantity of Golf DI = change in Income Io - Initial income level of I - New income level Go= Initial quantity of golf GI = New quantity of golf. At $60 15-10 x 50,000 + 70,000 70,ooo 0,ooo 10 + 15. - sl x 120,000 - 1.2 20,000 255 SAL $45 X SO 30-15 50,000 + 70,00 70,000 - 50,000 15+30 - x 120,000 - 1.99 x 2 80,000 45 Evening At $30 = 50-20 70,000 - 50,ODD 5 0,000 +70,000 Gutso. o = 2057 . Goff is a Normal good because there is a positive relation between change in more & change in quantity of goy. 2020

Answer 2

Wrong formula, you confused the hell out of em.