Let the income elasticity of demand for electricity be 0.10 and the cross-price elasticity of electricity...
-
Let the income elasticity of demand for electricity be 0.10 and the cross-price elasticity of electricity with respect to the price of food be -0.01. What would happen to the demand for electricity if incomes increased 10%?
Electricity use would increase 1%
Electricity use would increase 10%
Electricity use would decrease 1%
Electricity use would decrease 1%
Homework Answers
Add Answer to:
Let the income elasticity of demand for electricity be 0.10 and
the cross-price elasticity of electricity...
Let the short-run price elasticity of demand be -0.10. This suggests that if the price of...
Let the short-run price elasticity of demand be -0.10. This suggests that if the price of electricity rises from $0.05 to $0.06/kWh, that the quantity demanded of electricity will Decrease 1% Decrease 2% Decrease 10% Decrease 50%
Let the short-run price elasticity of demand for electricity be -0.30. If a supply interruption causes...
Let the short-run price elasticity of demand for electricity be -0.30. If a supply interruption causes the quantity of electricity provided to decrease 20%, what would be the short-run effect on prices. Prices would decrease 20% Prices would decrease 66% Prices would increase 20% Prices would increase 66%
Suppose the price elasticity of demand of alcohol is -2, the cross-price elasticity of demand between...
Suppose the price elasticity of demand of alcohol is -2, the cross-price elasticity of demand between alcohol and the price of marijuana is -0.5, and the price of marijuana has increased by 10% because of the drug busts. What would have to happen to the price of alcohol to exactly offset the rise in the price of marijuana and leave the quantity demanded of alcohol unchanged?
In Pioneer Ville, the price elasticity of demand for bus rides is 0.8, the income elasticity...
In Pioneer Ville, the price elasticity of demand for bus rides is 0.8, the income elasticity of bus rides is -1.2 and cross price elasticity of demand for bus rides with respect to gasoline is 1.1. a) Is the demand for bus rides elastic or inelastic? Why? b) Would an increase in the price of bus rides increase the bus companys total revenue? Explain your answer. c) If incomes increase by 5 percent with no change in prices, how will...
Suppose the income elasticity of demand for food is 0.5, and the price elasticity of demand...
Suppose the income elasticity of demand for food is 0.5, and the price elasticity of demand is -1.0. Suppose also that Felicia spends $10,000 a year on food, and that the price of food is $2 and her income is $25,000. If a $2 sales tax on food were to cause the price of food to double, what would happen to her consumption of food? Suppose that she is given a tax rebate of $5,000 to ease the effect of...
a) CROSS ELASTICITY OF DEMAND: What would happen to the market demand for beer if the...
a) CROSS ELASTICITY OF DEMAND: What would happen to the market demand for beer if the price of wine increased by 20%? You might want to distinguish between different types of beer. (Your answer should show you understand the concept of cross elasticity of demand.) b) INCOME ELASTICITY OF DEMAND: What would happen to the demand for fur coats if income went up by 20% What would happen to the demand for underwear if income went up by 20%. Again,...
Suppose the income elasticity of demand for food is 0.5 and the price elasticity of demand...
Suppose the income elasticity of demand for food is 0.5 and the price elasticity of demand is -1.0. Suppose also that you spends $10,000 a year on food, the price of food is $2, and that your income is $25,000. Ifa sales tax on food caused the price of food to increase to $2.50, what would happen to her consumption of food (i.e. how many units of food does she consume)? (Hint: Because a large price change is involved, you...
The cross-price elasticity of demand for steak with respect to a change in the price of...
The cross-price elasticity of demand for steak with respect to a change in the price of pork chops is estimated to be 0.42. What would be the effect on the quantity of steak demanded if the price of pork chops increased by 5%? Are steak and pork chops substitutes or complements?
Cross-price elasticities Rice & beans (-0.35) Rice & wheat (0.6) Rice & chicken (-0.1) Rice & milk (-0.05) Rice & other goods 0 Income elasticity of demand for rice (0.4) Questions...
Cross-price elasticities Rice & beans (-0.35) Rice & wheat (0.6) Rice & chicken (-0.1) Rice & milk (-0.05) Rice & other goods 0 Income elasticity of demand for rice (0.4) Questions: D) How much would the price of rice have to decrease in order to increase rice consumption by 5%? E) What would happen to bean consumption as a result of a 10 percent decrease in the price of rice? (Make sure to mention the direction and magnitude of the...
1. A product has a price elasticity (of demand) equal to 1.50. If price increases by...
1. A product has a price elasticity (of demand) equal to 1.50. If price increases by six percent, what will be the decrease in quantity demanded? 2. A product has an income elasticity of 0.75. If income rises by 8 percent, what will be the increase in demand? 3. In question 2, is the product most likely a luxury or necessity? Why? 4. The cross price elasticity between two products, L and M, is 0.40 (that is, the change in...
Suppose the income elasticity of demand for food is 0.5 and the price elasticity of demand is -1.0. Suppose also that you spends $10,000 a year on food, the price of food is $2, and that your income is $25,000. Ifa sales tax on food caused the price of food to increase to $2.50, what would happen to her consumption of food (i.e. how many units of food does she consume)? (Hint: Because a large price change is involved, you...
Most questions answered within 3 hours.
-
Assume Kw = 1.01 ✕ 10−14
For pure water, we can calculate [H3O+ ] = [OH...
asked 7 minutes ago -
Suppose that on a temperature scale X, water boils at 203.0°X
and freezes at -105.7°X. What...
asked 57 minutes ago -
BaS crystallizes in a cubic unit cell with S2- ions on each
corner and each face....
asked 1 hour ago -
A. 0≤P(Oi)≤10≤P(Oi)≤1 for each i
B. P(Oi)≤0P(Oi)≤0
C. P(Oi)=1+P(OCi)P(Oi)=1+P(OiC)
D. P(Oi)≥1P(Oi)≥1
If an experiment consists of...
asked 3 hours ago -
A battery has an emf of 9.20V and an internal resistance of 1.20
ohm. a)What resistance...
asked 2 hours ago -
The area of an elastic circular loop decreases at a constant
rate, dA/dt = −6.60×10−3 m2/s...
asked 4 hours ago -
The denaturation of proteins can be described by the
equilibrium
F⇌U
where F and U represent...
asked 5 hours ago -
Please answer what the maximum and minimum force is, and the
angle on the ion is...
asked 5 hours ago -
implement a program that reads a number of rows and a symbol.
The program will draw...
asked 5 hours ago -
Assume that when adults with smartphones are randomly selected,
45% use them in meetings or classes....
asked 5 hours ago -
Determine the number of formula units of
Na2SO4 and moles of oxygen contained in 8.11
moles...
asked 5 hours ago -
Explain in steps on the following code
What would be the output when executed
using System;...
asked 6 hours ago