A popular social media celebrity has recently touted the benefits of taking a hotel mini break in Australia. At the same time, in order to raise revenue, the Australian Government has decided to create a tax specifically on the hotel industry. If the effect of the social media celebrity is significant, and the tax only has a minor influence on the price of a hotel stay, will the market price of a stay in a hotel room be lower/equal/higher than it was before the social media celebrity's endorsement and the introduction of the tax? [a] (Type L for lower, E for equal, H for higher, N for need more information).
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- Income Effects depend on the income elasticity of demand for each good limit you buy. If one of the goods you buy has a negative income elasticity, that is, it is an inferior good, what must be true of the income elasticity of the other good you buy?Consider the demand for a luxury good such as a yacht. You can plot three different straight lines through the three points X, Y, and Z on this graph. Place the blue line (circle symbol) so that it goes through two of the points and shows the most likely demand curve for this type of good. Hint: Consider the relative elasticities of the different possible demand curves. 120 100 Demand Curve メ) 60 メャ メマ 40 20 0. 2. 4. 6. 8 10 12 LUXURY GOODS (Thousands per year) 14 16 PRICE (Dollars per yacht)Income effects depend on the income elasticity ofdemand for each good that you buy. If one of the goodsyou buy has a negative income elasticity, that is, it is aninferior good, what must be true of the income elasticityof the other good you buy?
- Mr. Shrikant always spends 20% of his income on commodity 'X'. The income elasticity of demand for commodity 'X' is O a. 0,15 O b. 6.67 OC -0.15 Od . 14G l 7:08 68 https://vle.usm.edu.ph/m 2 Aretail store faces a demand equation for Roller Blades given by: Q = 180 - 1.5P where Q is the number of pairs sold per month and P is the price per pair in dollars. If we get the inverse demand or the price equation from the above equation, what will be the new demand equation? Select one: a. P = 0.67Q - 120 b. P = Q - 120 c. P = Q - 180 d. P = 1.5Q - 180Suppose that the demand schedule for rice for a Saudi family is as follows:PriceQuantity DemandedOf Rice Per Month(income = SR 10,000)Quantity DemandedOf Rice Per Month(income = SR 15,000)SR 5 60 70SR 4 80 95SR 3 100 120SR 2 120 145SR 1 140 170a. Given the table above, draw the demand curve of rice using Excel.b. Show what will happen to your graph if this family like now less rice as they are eatingmore outside.c. Use the midpoint method to calculate the price elasticity of demand as the price of riceincreases from SR 4 to SR 5 if (i) family’s income is SR 10,000 and (ii) family’s income is SR15,000.d. Calculate the income elasticity of demand of this family as their income increases fromSR 10,000 to SR15,000 if (i) the price is SR 3 and (ii) the price is SR 1.
- Explain the difference between a positive and a negative network externality. A network externality for a good is positive if O A. the substitution effect of a price change is larger than the income effect, but a network externality is negative if the income effect is larger than the substitution effect. B. consumption by others decreases a typical consumer's marginal utility from consuming the good, but a network extemality is negative if consumption by others increases a typical consumer's marginal utility from the good. c. the price is lower the more people own it, but a network externality is negative if the price is lower the fewer people own it. D. the quantity demanded is higher the more people own it, but a network externality is negative if the quantity demanded is lower the more people own it. O E. it has a complement, but a network effect is negative if it has a substitute. Give an example of each. An example of a positive network externality is the dermand for A. a work of…P t onces In a statement to P&G shareholders, the Chief executive officer (CEO) of Gillette (which is owned by P&G) indicated, "Despite several new product launches, Gillette's advertising-to-sales declined dramatically... to 5 percent last year. Gillette's advertising spending, in fact, is one of the lowest in our peer group of consumer product companies." If the elasticity of demand for Gillette's consumer products is similar to other firms in its peer group (which averages -4.5), what is Gillette's advertising elasticity? Instructions: Enter your response rounded to two decimal places. Is Gillette's demand more or less responsive to advertising than other firms in its peer group? O Less responsive More responsive It responds the same.A few years ago, the United State PostalService commissioned a study into theprice elasticity of demand for postagestamps. The study found that own priceelasticity of demand is relatively inelastic.If that is the case, how will the UnitedState Postal Service’s revenue change ifthey increase the price of stamps?A) Increasing the price of stamps will increase revenueB) Increasing the price of stamps will decrease revenueC) Increasing the price of stamps will notchange revenueD) There is not enough information to say
- ent Course ons @ 2 W 3 e d For each of the following pairs of goods, select which is likely to have more INELASTIC demand. In the next question you will explain your answer (for one of them), but for now select which is more likely to be more inelastic. (a) Gasoline OR Strawberry Car Air Freshener [Select] (b) Peanut Butter M&M's at 7-11 OR All Candy at 7-11 [Select] (c) The only tailor in a small city OR One of 15 dry cleaners in the same city [Select] C $ 4 % 5 t 5.0 g Oll 6 O b y h & N 7 U n 8 O i E ( 9 k ✓ OPlease refer to the table below Price of iPhones. $700.00 $650.00 $500.00 $450.00 $300.00 $275.00 $250.00 $100.00 $50.00 Christy's Demand OA) 5 OB) 8 OC) 28 OD) 45 0 1 1 2 4 5 6 7 10 Lori's Demand. 0 0 1 2 3 4 4 5 Assume that the market for iPhone has only two consumers: Christy and Lori. According the table above, if the price of an iPhone is $275, the market will demand iPhones.If Andrew would like to buy slippers, he has to check the prices and the number of quantities that will fit to his financial capabilities. If at a price of $220 he can buy 3 slippers, however if he will be given a discount of $50, he would like to buy 5 slippers. Show the value of E using the Price elasticity formula and identify the kinds of E. Let’s see of his capabilities be translated based on his income of $8,000 and an increase of 20% with the same number of slippers. What do you think of his EY and what kind of goods he is capable of buying? On the other hand if changes in price would be interpreted by looking at its cross relationship with same price original and a 35% increase in price due to inflation, but still Andrew, considered the same number of quantities since its Christmas season.