Suppose the demand schedule for burritos is as follows: Quantity Demanded (Income = $90,000) 25 Quantity Demanded (Income $30,000) Price 20 $5 22 16 15 12 10 8 6 4 $$999 increases from $30,000 to $90,000 if the price is $6. Does this calculation suggest that burritos are a normal or inferior good? Explain. 5. (Refer to the Table on p.1) Calculate your income elasticity of demand when your income 6. Suppose the price elasticity of demand for cigarettes equals 0.27 in North Dakota and 1.95 in Minnesota. To increase revenues, cigarette manufacturers would (increase prices / leave prices unchanged / decrease prices) in North Dakota and (increase prices/ leave prices unchanged / decrease prices) in Minnesota Explain each answer briefly.

Suppose the demand schedule for burritos is as follows: Quantity Demanded (Income = $90,000) 25 Quantity Demanded (Income $30,000) Price 20 $5 22 16 15 12 10 8 6 4 $$999 increases from $30,000 to $90,000 if the price is $6. Does this calculation suggest that burritos are a normal or inferior good? Explain. 5. (Refer to the Table on p.1) Calculate your income elasticity of demand when your income 6. Suppose the price elasticity of demand for cigarettes equals 0.27 in North Dakota and 1.95 in Minnesota. To increase revenues, cigarette manufacturers would (increase prices / leave prices unchanged / decrease prices) in North Dakota and (increase prices/ leave prices unchanged / decrease prices) in Minnesota Explain each answer briefly.

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter6: Elasticity

Section: Chapter Questions

Problem 3QP: Prove that price elasticity of demand is not the same as the slope of a demand curve.

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