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3. Use graphs to demonstrate the income elasticity of: Steaks, Hamburgers, and Ramen noodles. What assumption...

3. Use graphs to demonstrate the income elasticity of:

  1. Steaks,
  2. Hamburgers, and
  3. Ramen noodles.

What assumption did you make about each product in regard to its income elasticity? Use the appropriate economic terms in describing your assumptions. What is the economic significance of this for US agriculture? Explain. (30 points)

4. Consider a competitive market for pork with the quantity demanded (per year) at various prices are given as follows:

Price (dollars/kg)

Demand (million kg)

60

22

80

20

100

18

120

16

Calculate the price elasticity of demand when the price is $80/kg. (5 points) Calculate the price elasticity of demand when the price is $00/kg. (5 points) Calculate the arc elasticity between price of $80/kg and $100/kg. (5 points)

5. What impact will animal rights laws that cause producers to change their production practices have on the price and quantity of meat? Hint: be careful here… think about both demand and supply.

6. The own-price elasticity is related to changes in quantity demanded. Cross-price elasticities are related to changes in demand. Explain this statement.

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Date P- 8o 2. 80 80 o4 (A Ap 9 18 180 lo 19 means--.c

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