Check Your Understanding Week free essay sample

Demand for Tweetie Sweeties by General Cereals question: a. The price elasticity is -2. 15, which is elastic. b. The advertising elasticity 1. 05. c. The population elasticity is 3. 70. A one-percent increase in the population over under the age of 12 will lead to a 3. 7% increase in the demand for Tweetie Sweeties. 6. Demand for haddock question: a. The price elasticity is -2. 174, which is elastic. a. The income elasticity is 0. 461, which is a normal good, but a necessity like most food items. b. The cross price elasticity with meat and poultry is 1. 09. Fish and meat/poultry are substitutes. c. Haddock is elastic, a necessity, and other meats are close substitutes. d. A 5% increase in income leads to a (. 461)(5%) = 2. 305% increase in the demand for Haddock. 7. Demand for furniture question: a. The income elasticity of furniture is 1. 08, which puts it in the luxury category. The price elasticity (using real prices) is -0. 48, which is inelastic. b. R is the value of private con struction per household. We will write a custom essay sample on Check Your Understanding Week or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page For a 1% increase in the private residential construction, there is a . 16% increase in furniture purchases. The greater the amount spent by families on their housing, the more furniture that they acquire. c. If all furniture was alike, using physical units could work. Some furniture is elaborate, with rare wood or costly fabrics, while others are cheaply constructed. Revenue is not perfect, but it allows chairs, tables, and Armoires to be added together in dollar values. In units, the price elasticity is shows how a 1% price jump in real prices affects units sold; whereas in revenue, the price elasticity shows how a 1% real price increase impacts the dollar value of goods sold.