ForQuestions 1-4, assume that the following information is known. Recent research has revealed that drinking 8-ounces of orange juice a day can improve heart health.As a result, the price of orange juice has increased by 20%.In addition, the following is known regarding the orange juice market:

The elasticity of supply orange juice is +0.15.

The elasticity of demand for orange juice is -0.25.

The cross-price elasticity of milk with respect to the price of orange juice is +0.4

The income elasticity of orange juice is +0.75.

1.From the data above, what can you determine about orange juice?

a.Orange juice is a luxury good.

b.Orange juice and milk are complements.

c.The demand for orange juice is inelastic.

d.All of the above are true.

2.Given the 20% increase in the price of orange juice, what will be the expected change in the quantity of orange juice traded in the market?

a.An 80% decrease in the quantity traded.

b.A 5% decrease in the quantity traded.

c.A 3% decrease in the quantity traded.

d.A 3% increase in the quantity traded.

3.What will happen to the total revenue of the orange juice producers?

a.Decrease.

b.Not enough information to tell.

c.Increase.

d.Stay the same.

4.What will happen in themilk marketdue to the price change in the orange juice market?

a.The demand for milk will decrease.

b.The demand for milk will increase.

c.The supply of milk will increase.

d.The supply of milk will decrease.