1.

Elasticity: End of Chapter Problem @Macmillan Learning An important tradition in the Santos family is that they eat the same meal at their favorite restaurant every Sunday. By contrast, the Chen family spends exactly $50 for their Sunday meal at whatever restaurant sounds best. a. Which family has a more elastic demand for restaurant food? The has a more elastic demand. b. Which family has a unit elastic demand for restaurant food? Hint: How would each family respond to an increase in food prices? The has unit elasticity.Lidot Chapter Problem Macmillan Learning An important tradition in the Santos family is that they eat the same meal at their favorite restaurant every Sunday. By contras the Chen family spends exactly $50 for their Sunday meal at whatever restaurant sounds best. a. Which family has a more clastic demand for restaurant food? The has a more clastic demand. h. V Chen family hit clastic demand for restaurant food? Hint: How would each family respond to an thercase in foot Santos family The has unit clasticity.a. Which family has a more elastic demand for restaurant food? The has a more elastic demand. h. Which family has a unit clastic demand for restaurant food? Hint: How would each family respond to an increase in food prices? The has unit elasticity. Chen family Santos family. Elasticity: End of Chapter Problem Many economists have estimated elasticities of oil demand. Let's see if a rise in the price of oil hurts oil revenues in the long run. Cooper, the author cited in this chapter, found that in the United States, the long-run elasticity of oil demand is -0.5. OM a. If the price of oil rises by 10%, by how much will the quantity of oil demanded fall? The quantity demanded will fall by O 5%. O 0.5% O 2%. O 20%. b. Does a 10% rise in oil prices increase or decrease total revenues to the oil producers? Revenue will O rise. O fall. c. Some policymakers and environmental scientists would like to see the United States cut back on its use of oil in the long run. We can use this elasticity estimate to get a rough measure of how high the price of oil would have to rise in order to get people to make big cuts in oil consumption. How much would a permanent rise in the price of oil have to be to cut oil consumption by 50%? The price would have to rise by %. d. France has the largest long-run elasticity of oil demand (-0.6) of any of the large, rich countries. This suggests that France is at responding to long-run price changes than other rich countries.Elasticity: End of Chapter Problem Is the demand for cigarettes likely to be clastic or inelastic? Explain your reasoning. Cigarette demand is most likely because cigarettes clastic inclasticElasticity: End of Chapter Problem Is the demand for cigarettes likely to be clastic or inelastic? Explain your reasoning. Cigarette demand is most likely because cigarettes are addictive and have few substitutes are inexpensive and have many substitutes