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Can anyone show me the step by step solution. I'm confused with this question 14. Suppose that a consumer is considering buying two goods: (i)

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Can anyone show me the step by step solution. I'm confused with this question

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14. Suppose that a consumer is considering buying two goods: (i) nails, and (ii) screws. Below has some data on prices for each of these goods, the household's income, and the quantity of each that they demanded under each set of prices and incomes: Quantity of Price of Nails Quantity of Price of Screws Income Nails Screws 6 $11.00 17 $6.00 $1000 8 $10.00 18 $6.00 $1000 10 $9.00 19 $6.00 $1000 18 $7.00 17 $6.00 $1500 20 $6.00 18 $6.00 $1500 22 $5.00 19 $6.00 $1500 10 $11.00 15 $6.00 $2000 12 $10.00 16 $6.00 $2000 14 $9.00 17 $6.00 $2000 a) Suppose that the household's income is $1000 and the price of screws is equal to $6.00. Suppose that the price of nails drops from $11.00 to $9.00 ceteris paribus. Calculate the price elasticity of nails over that range (i.e from $11 to $9) Is the elasticity inelastic, elastic or unit elastic? Answer here: b) Suppose that the household's income is $1500 and the price of screws stays equal to $6.00. Suppose that the price of nails drops from $7.00 to $5.00 ceteris paribus. Calculate the cross-price elasticity for screws with respect to the price of nails over that range (i.e from $7 to $5). Dose this show that nails and screw are substitutes or complement? Answer here: c) Using the above data, are nails a normal good or an inferior good? Also, are screws a normal good or an inferior good? How do you know? Note: No expected elasticity calculators are required for part c. Answer here

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