The market for ice-cream is in equilibrium. Now suppose that price of milk used to make ice cream falls and at the same time a new research shows that eating ice cream reduces risk of heart disease. What will be the effect of these changes on the 16 equilibrium price and quantity in the ice-cream market? Multiple Choice points 01:24:56 O Quantity will increase, and effect on price is ambiguous. O Price will increase, and quantity will increase. O Price will increase, and effect on quantity is ambiguous. O Price will decrease, and quantity will increase.Suppose the own price elasticity of demand for good X is -3, its income elasticity is -3, its advertising elasticity is 4, and the cross- 17 price elasticity of demand between it and good Y is 2. Determine how much the consumption of this good will change if: Instructions: Enter your responses as percentages. If you are entering a negative number, be sure to use a (-) sign. 4 a. The price of good X decreases by 7 percent. points percent 8 01:24:50 b. The price of good Y increases by 9 percent. percent c. Advertising decreases by 2 percent. percent d. Income increases by 5 percent. percentif quantity demanded for sneakers falls by 10 percent when price increases 25 percent, we know that the absolute value of the own price elasticity of sneakers is 18 Multiple Choice points 01:24:45 O 2.5. O 2.0. O 0.27 O 0.4.19 We would expect the demand for jeans to be Multiple Choice points 8 01:24:40 O less elastic than the demand for clothing. O more elastic than the demand for clothing. O neither more elastic, less elastic, nor the same elasticity as that of the demand for clothing. O the same as the demand for clothing.2 0 When the price of sugar was "low," U.S. consumers spent a total of $3 billion annually on sugar consumption, When the price doubled, consumer expenditures increased to $5 billion annually, This data indicates that Multiple Choice 1 Points O the demand curve ior sugar ls upward sloping and the quantity demanded or sugar increased. the quantlty demanded of sugar increased. the demand curve for sugar is upward sloping. O the demand for sugar is inelastic