1.Suppose that the price of a kilo of bananas drops from $4 to $2.4, and as a result, the quantity sold increase from 80 to 170 kilos.

a) What is the value of total revenue before and after price change? Round your answer to 1 decimal place

$_______ and $ ________

b) What is the percentage change in the price?

______

c)What is the percentage change in the quantity?

_____

d)What is the value of the price elasticity of demand? Round your answer to 2 decimal places

_____

e)Is the demand elastic or inelastic?

_____

2.If the quantity of bread supplied increased by 14 percent when the price increased by 10 percent, what is the value of the elasticity of supply? Round your answer to 2 decimal places

______

3.Suppose that household income in Sherbrook changed from $96,000 to $104,000 and assuming no change in price, the quantity of a popular product sold changed from 57 to 63 cases per week.

a)What is the value of the income elasticity of demand for a popular product? Round your answer to 3 decimal places. When applicable, remember to enter a minus (-) sign to indicate negative values

________

b)What does this suggest about this product?

Inferior , Luxury or Necessity

4.Suppose that the price of president's Choice macaroni and cheese decreased from $10 to $8 per case, and at the same time, the quantity of Kraft macaroni and cheese sold dropped from 192 and 128 cases.

a)What is the cross-elasticity of demand between the two products? Round your answer to 2 decimals places.

______

b)What is the relationship between the two products?

They are ______ (substitutes or permanents)