1. For each of the following pairs of goods , which good would you expect to have more elastic demand and why ? a. Required textbooks or mystery novels b. Tim McGraw music or country music recordings in general. c. electricity during the next six months or electricity during the next five years d. Coke or soda in general 2. Kahuna Burgers - Jim and Jane have opened a new restaurant in town , JJ's Burgers Their burgers are quite popular, especially the Big Kahuna burger, which was written about in the local weekly newspaper and mentioned by a local entertainment blogger online. Jim tells Jane that since the burger is so popular, they should raise the price to make more money. a. Given what you know about price elasticity of demand , is Jim correct that a price increase would bring in more money? b. The Big Kahuna burger sells for $10.00 and 200 are sold each week . What is JJ's total revenue from Big Kahuna burgers? c. Jim suggests a 10 percent price increase for the Big Kahuna burger, raising the price to $11.00 . After the price change , JJ's sells 160 Big Kahuna burgers a week . What is the percentage change in the quantity demanded after the price change? d. What is the price elasticity of demand for JJ's Big Kahuna ? Use the price elasticity formula to determine if the price elasticity is elastic or inelastic e. What is JJ's total revenue after the price increase ? Using the total revenue approach , is the price elasticity of demand for JJ's Burgers elastic or inelastic ? How do you know? 3. Peanut Butter and Jelly - Consider the case of a consumer that buys peanut butter in six -packs . Use the information that follows to calculate the appropriate elasticities of demand a. When the price of a six-pack increased from $18 to $22, the number of six- packs bought decreased from 30 to 20. What is the consumer's price elasticity of demand in this case ? How did the consumer's total spending on peanut butter change as a result of this ? (Spending by the consumer equals total revenue firms selling peanut butter.)