The accompanying table shows the price and yearly quantity sold ofsouvenir Tshirts in the town of Silver Lake according to the averageincome of the tourists visiting. Price of T-shirt Quantity of T-shirtsdemanded when the average tourist income is$20,000 Quantity of T-shirts demanded when the average tourist incomeis $30,000 $43,000 5,000 $5 2,400 4,200 $6 1,600 3,000 $7 800 1,800*Ia. Using the midpoint method, calculate the price elasticity of demandwhen the price of a T-shirt rises from $5 to $6 and the averagetourist income is $20,000. Also calculate it when the averagetourist income is $30,000.b. Using the midpoint method, calculate the income elasticity ofdemand when the price of a T-shirt is $4 and the average touristincome increases from $20,000 to $30,000. Also calculate it whenthe price is $7.

The price and income elasticity of demand for souvenir T-shirts in Silver Lake are important factors…

Answered: The accompanying table shows the price…

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 7PA: Maria has decided always to spend one third of her income on clothing. a. What is her income...

See similar textbooks

Similar questions

Maria has decided always to spend one third of her income on clothing. a. What is her income elasticity of clothing demand? b. What is her price elasticity of clothing demand? c. It Marias tastes change and she decides to spend only one fourth of her income on clothing, how does her demand curve change? What is her income elasticity and price elasticity now?
Your Best Brand Bike Shorts-BBB Shorts have been flying off the shelf. Your chiefeconomist tells you that during the Covid-19 pandemic, the taste for bicycling has shifted. Thedemand curve is much more inelastic. The price elasticity of demand has decreased from:-5.76 to -2.70.”Before the campaign your price was $240 per pair of BBB Shorts. What should bethe new price? Please show calculations.
What are 2 products with different price elasticities of demand, and how do you analyze how firms can use information about price elasticity of demand to their advantage?
Refer to the figure below. If Mallory and Rick are the only two consumers in this market and the price of soda is $0.75 per can, then what will be the market demand for soda each month? Mallory's Demand for Sodal Rick's Demand for Soda Price ($/can) 1.50 1.25 1.00 0.75 0.50 0.25 0 0 10 20 30 40 50 60 70 Quantity (cans of soda/month) rev: 02_01_2018_QC_CS-116371 O 70 50 O 30 O 20 Price ($/can) 1.50 1.25 1.00 0.75 0.50 0.25 0 0 10 20 30 40 50 60 70 Quantity (cans of soda/month)
1. The manager of a fleet of cars currently rents them out at the market price of $49 per day,with renters paying for their own gasoline and oil. In a front-page newspaper article, themanager learns that economists expect gasoline prices to rise dramatically over the nextyear, due to increased tensions in the Middle East. What should she expect to happen to theprice of the cars her company rents?
You have just opened a new grocery store. Every item you carry is generic (generic beer, genericbread, generic chicken, etc.). You recently read an article in the Wall Street Journal reporting thatthe price of recreation is expected to increase by 15 percent and cross price elasticity is 0.15. will this affect your store’s salesof generic food products?
The shorter the period of time consumers have to adjust to price changes, the O lower; income O lower price O higher; income higher; price the elasticity of demand.
Assignment 2 1. The graph below shows the demand curve of two goods by an individual, use the information in the graph to answer the questions that follows; Price GH¢30.00 B. GHe25.00 D1 D2 2000 2500 3000 Quantity (gallons per day) (a) Calculate the price elasticity of demand for the demand curve, D1, from point A to point C, and the price elasticity of demand for D2 from point A to point B. which demand curve is more elastic, Di or D2? Briefly explain your answer. (b) Given the expenditure function as e(p.q)-pq where p is the price and q is quantity demand. Suppose the individual was purchasing 2000 gallons per day at a price of GH¢30.00 per gallon and the price is cut to GHc25.00 per gallon. calculate thhe change in total expenditure if the demand curve of the individual is D1? What will be the change in total expenditure if demand is D2?
Using the table below calculate the cross price elasticity of skirts. Are these goods substitute or complement? Briefly explain. Price of sandals Price of skirts Quantity Demanded of sandals Quantity demanded of skirts $5 $4 60 100 $4 $2 80 70
Which of these products would demonstrate the most elasticity in a middle-income household? a. Fruit juice b. Toothpaste c. A dining room table d. A newspaper e. Brown bread
Suppose that the demand and supply schedules for raisins in South Carolina are as fallows, quantitiesare measured in millions of packs per month. What is the quantity of raisins bought if the price is 50cents ? Price (cents per pack) Quantity demanded20 18030 16040 14050 12060 10070 8080 60 a) 120b) 180c) 100
Jeremy's (own) price elasticity of demand is 7.89 in absolute terms. Whenthe price rises from $4 to $13 what do you predict will be his percentagechange in quantity demanded?

SEE MORE QUESTIONS

Recommended textbooks for you

Principles of Microeconomics

Economics

ISBN:

9781305156050

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Microeconomics: Principles & Policy

Economics

ISBN:

9781337794992

Author:

William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:

Cengage Learning

MACROECONOMICS

Economics

ISBN:

9781337794985

Author:

Baumol

Publisher:

CENGAGE L

Principles of Microeconomics

Economics

ISBN:

9781305156050

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Microeconomics: Principles & Policy

Economics

ISBN:

9781337794992

Author:

William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:

Cengage Learning

MACROECONOMICS

Economics

ISBN:

9781337794985

Author:

Baumol

Publisher:

CENGAGE L

Economics Today and Tomorrow, Student Edition

Economics

ISBN:

9780078747663

Author:

McGraw-Hill

Publisher:

Glencoe/McGraw-Hill School Pub Co

SEE MORE TEXTBOOKS