1. Suppose the cross-price elasticity of demand between goods X and Y is 4. How much would the price of good Y have to change in order to change the consumption of good X by 50 percent? Instruction: If you are entering a negative number, be sure to use a negative sign ().

2.

With milk sales sagging of late, The Milk Processor Education Program (MPEP) decided to move on from the famous "Got Milk" ad slogan in favor of a new one, "Milk Life." The new tagline emphasizes milk's nutritional benefits, including its protein content. MPEP began collecting data on the number of gallons of milk households consumed weekly (in millions), weekly price per gallon, and weekly expenditures on milk advertising (in hundreds of dollars) for the period following the launch of the new campaign. These data are available via the link below. Use these data to estimate a linear regression. Excel Data File Suppose that the weekly price of milk is $3.40 per gallon and MPEP decides to ramp up weekly advertising by 35 percent to $150 (in hundreds). Use your regression model to estimate the weekly quantity of milk consumed after this advertising increase. Instructions: Round your intermediate calculations and enter your response rounded to three decimal places. million gallons per week