Question
a) When people's incomes rise from $18,000 to $22,000 a year, their annual purchases of oranges rise from 78 to 82. What is the income
a) When people's incomes rise from $18,000 to $22,000 a year, their annual purchases of oranges rise from 78 to 82. What is the income elasticity of demand? Please write the formula first then calculate.
b) When the price of a box of herbal tea bags rises from $0.99 to $1.21, the quantity offered for sale rises from 400,000 to 600,000. What is the price elasticity of supply?
Please write the formula first then calculate.
c) When the price of wheat rises from $2.34 to $2.46, some farmers switch crops, and the amount of barley offered on the market falls from 101 million bushels to 99 million. What is the cross elasticity of supply? Please write the formula first then calculate.
d) When the wage rate rose from $6.25 an hour to $6.75 an hour, employment in Fastfood, Inc. fell from 5,100 to 4,900. What is the price elasticity of demand for labor? Please write your formula first then calculate.
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