1. (5 points) When bottlers increased the price of canned soda from vending machines by 10%, sales dropped by 2.5%. Calculate the price elasticity of demand for canned soda. 2. (5 points) Sal's boss has just told him that if he fails to increase the volume of his sales by 8%, he'll be fired. In order to meet his goals, Sal is considering putting his product on sale. If the current price of his product is $20 and the price elasticity of demand for his product is 2.0, how much should the sale price be in order to meet his goal? 3. (5 points) Yogi eats a sizable quantity of pizza by the slice, and generally pays $5 per slice at the vending cart outside his office. When a new vendor on the block begins offering (the same quality) pizza at $4 per slice, Yogi finds that his monthly total expenditures on pizza rise. What can you say about Yogi's elasticity of demand for pizza. 4. (10 points) Some economists have calculated the following price, cross-price, and income elasticities: _ (a) According to the table, the price elasticity of demand for beef is 0.65. If the price of beef decreases a little bit, what do you expect to happen to the revenue of beef producers as a whole? Explain your answer. (b) According to the table, the cross-price elasticity of demand for chicken with respect to the price of pork is 0.20. Are chicken and pork substitutes or complements? Explain your answer. (c) Your friend says that out of beef, pork, and chicken, only beef is a normal good because it . has the largest income elasticity. Is she right? Why or why not? ((1) If chicken becomes cheaper and an average household income increases, would the dee mand for beef increase unambiguously? Why or why not? \