(a) Inflation and the rising cost of living are currently a big problem. Suppose that the prices of all the goods in your consumption bundle increase at the same rate of 5%. The Union negotiated a nominal salary increase of the same rate, 5%. You are equally well off.
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![Question 1 True, False, or Uncertain? Justify your answers.
(a)
Inflation and the rising cost of living are currently a big problem. Suppose
that the prices of all the goods in your consumption bundle increase at the same rate
of 5%. The Union negotiated a nominal salary increase of the same rate, 5%. You
are equally well off.
(b)
in X. Tom's income elasticity of demand for X is B, where B > 0. Tom's (Marshal-
lian) demand for X has a price elasticity equal to -0.43. X and Y are perfect
complements for Tom. [Hint: Slutsky equation.]
Tom consumes only two goods, X and Y
spends 40% of his income](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdf715320-31b3-4813-9a7f-047469628c07%2Fd7c8a9f6-6e32-4260-8177-d7ba94a05d01%2Fvfscpc4_processed.png&w=3840&q=75)
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- indicates how much of a product consumers are both willing and able to but at each possible price during a given period, other things constantIf the budget line rotates from blue to red: Good A 1200A, OBI (100A, OB) Bligertneone -S0. F-SL S2 (0A, SO8) Good B O The monetary price of B is rising. O The monetary price of B is falling. The monetary price of A is rising. O The monetary price of A is falling. The relative price of A is rising. The relative price of A is falling. The relative price of B is rising. O The relative price of B has fallen.Budgetary slack is when budget numbers are challenging but include achievable levels of expected performance intended to create a little discomfort, yet stretch targets are the practice of of underestimating revenues, overestimating costs, or overestimating time in order to make the budget targets more easily achievable. True O False
- Industries like manufacturing, retailing and utilities are considered seasonal and may exhibit uneven or seasonal demand true or false [ dont use chatgpt]The manager of a small town grocery store who is in charge of ordering products reads in the newspaper that the unemployment related to the Covid-19pandemic is expected to decrease local incomes by 2596 on average in the next month. He knows that the income elasticity of demand for rice isapproximately -0.5. Given that rice is agood, the manager should stockrice.O A. normal: 109 moreO B. inferior: 12.595 moreO C. inferior: 12.59 lessO D. normal: 12.596 lessIn general, a commodity that has greater importance would result to Select one: a. Elastic b. neither c. inelastic d. Unit elastic
- The table shows the average income of households and the quantity demanded of products M and N at different prices and levels of income. Year Average Income Price of M Quantity of M Price of N Quantity of N1 $42,000 $2.50 105 $16 7302 42,000 2.90 100 16 7003 42,000 2.90 95 28 6704 48,000 2.90 105 28 710 a) What is the price elasticity of demand for product M between years 1 and 2? Round your answers to 2 decimal places. b) What is the price elasticity of demand for product N between years 2 and 3? Round your answers to 2 decimal places. c) What is the income elasticity of demand for product M between years 3 and 4? Round your answers to 2 decimal places. d) What is the income elasticity of demand for product N between years 3 and 4? Round your answers to 2 decimal places. e) What is the cross-elasticity of demand of product M for a change in the price of product N between years 2 and 3? Round your answers to 2 decimal places and remember to enter a minus (-) sign to…Hello I need help with that question plz and thanks Suppose that you won the lottery and received $50 million cash after all taxes were paid. 1. Would your preferences change as a result of this fortunate event? Why or why not? 2. Now that money is largely not a constraint to you achieving your dreams, what constraints would you still face? 3. With regard to price elasticity of demand, would this increase in wealth change the elasticity for goods you consume on a regular basis? Why or why not?The table shows the average income of households and the quantity demanded of products M and N at different prices and levels of income. Year Average Income Price of M Quantity of M Price of N Quantity of N 1 $42,000 $2.50 105 $16 730 2 42,000 2.90 100 16 700 3 42,000 2.90 95 28 670 4 48,000 2.90 105 28 710 a) What is the price elasticity of demand for product M between years 1 and 2? Round your answers to 2 decimal places. b) What is the price elasticity of demand for product N between years 2 and 3? Round your answers to 2 decimal places. c) What is the income elasticity of demand for product M between years 3 and 4? Round your answers to 2 decimal places. d) What is the income elasticity of demand for product N between years 3 and 4? Round your answers to 2 decimal places. e) What is the cross-elasticity of demand of product M for a change in the price of product N between years 2 and 3? Round your answers to 2 decimal places and remember to…
- A 10% percentage change in the income of a person resulted in 25% change in his demand for a particular product. Determine the products income elasticity of demand. a. 1.5 b. 0.5 c. 2.5 d. 1.2The price of crude oil increased to its highest level due to conditions which impactedsupply. Historically, crude oil has traded at between 70 and 150 USD per barrel. But theprice increased to over 200 USD in March 2022. Growing demand in Canada for crude tobe turned into refined petroleum, coupled with a sharp fall in production in Saudi Arabiahave both been factors in the price increase. Bauxite production in Saudi Arabia for 2017-18 fell 65% year-on-year due to an agreement with OPEC. The Energy InformationAdministration predicts that global consumption of crude oil is likely to be greater thanproduction by 20 million barrels this year.In the US, companies in the steel and alumina industry have put pressure on the USgovernment to relax import controls, warning that otherwise they might run out of petrol.Commentators predict that most steel and alumina producers will be unaffected becausecrude is such a small part of their spending.a. Explain, using supply and demand analysis, why…ework (Ch 05) PRICE (Dollars per unit) 160 140 120 100 80 60 40 20 0 * M M → O 20 40 60 80 100 120 140 160 180 200 QUANTITY (Units) sing the graph, complete the table that follows by indicating whether each statement is true or false. Statement Between points V and Y, curve OO is elastic. Between points V and W, curve NN is perfectly elastic. Curve OO is less elastic between points V and Y than curve LL is between points V and X. True False 00