a. The price of a good increased between 2016 and 2017, yet in 2017 consumers purchased a higher quantity of this good than in 2016. In other words, as the price of this good rose, consumers purchased more of it. Does the law of demand not apply in this case? Explain.

b. Which goods is likely to have the largest positive income elasticity of demand?Which goods is likely to have the lowest income elasticity of demand? explain your answer.

Water, Jewelry, Junk Food

c. Which goods has a larger (in absolute value) price elasticity of demand and explain.

Coffee vs. Starbucks Coffee

d. Suppose you are in charge of sales for a manufacturer of a line of cosmetics products. The company is interested in increasing their revenues. They estimate that the price elasticity of demand for their product is -1.5. Would you advise the company to lower, or, raise its price? Fully explain your answer. You can supplement your answer with graphs(not mandatory).

e. Consider peanut butter and Jelly. What sign do you expect the cross-price elasticity of demand between them to be? Explain your answer.