Use the estimates of elasticities for Australia in the table below which is a modified version of Table 4 from Ulubasoglu et al (2016) to answer the following questions.

Food Price Elasticity of Demand Income Elasticity of Demand Milk 0.233 0.371 Other Dairy products 0.999 1.004 Bread 0.733 0.449 Rice 2.657 1.196 Beef and veal 1.353 1.636 Mutton and lamb 1.420 1.637 Pork 2.203 1.592 Other meat 0.846 1.259 Poultry 1.388 1.381 Fresh fruit 1.049 0.755 Fresh vegetables 0.526 0.888 Preserved fruit 0.439 1.516 Preserved vegetables 1.383 1.230 Sugar and jam +1.018 1.187 Margarine 1.696 0.938 Source: Table 4 from Ulubasoglu, M., Mallick, D., Wadud, M., Hone, P. and Haszler, H., 2016. "Food demand elasticities for Australia". Australian Journal of Agricultural and Resource Economics, 60(2), pp.177-195

Which food listed in the table is least responsive to price changes? Interpret the good's price elasticity of demand. Why is the demand for this good not very responsive to price changes?

Given the range of values own-price and income elasticities can take, can you see any estimates in Table 4 that appear to be invalid? If so, explain why?

If the price of poultry were to increase by 20%, estimate the percentage change in the demand for poultry.

Which foods in the table are necessities? Use the income elasticity of demand to explain why these goods are considered necessities.

If the Australian economy enters a boom and incomes grow by 10%, which three goods in the table, would you expect to have the greatest increase in demand? Explain why.