Calculate the cross elasticity of lorenas demand for golf

Assignment Help Business Economics
Reference no: EM131019612

Question: Lorena likes to play golf. The number of times per year that she plays depends on both the price of playing a round of golf as well as Lorena's income and the cost of other types of entertainment -in particular, how much it costs to go see a movie instead of playing golf. The two demand schedules in the table below show how many rounds of golf per year Lorena will demand at each price under two different scenarios. In scenario D1, Lorena's income is $50,000 per year and the movies cost $9 each. In scenario D2, Lorena's income is $70,000 and the price of movies rises to $11 each.

Quantity demanded

PRICE ($)
D1              D2
50              15
10              35
25              15

a) Using the data under D1 and D2, calculate the cross elasticity of Lorena's demand for golf at all two prices. Are movies and golf substitutes, complements or independent goods?

b) Using the data under D1 and D2, calculate the income elasticity of Lorena's demand for golf at all two prices. Is golf an inferior good?

Reference no: EM131019612

Questions Cloud

Does inductance approximate either an open or short circuit : We have an inductance L with an initial current of zero and the voltage across the inductance is given by v(t) = Vm cos( ωt). Suppose that ω is very large ideally, approaching infinity. For this voltage, does the inductance approximate either an ..
You have mentioned about nasal receptors : You have mentioned about nasal receptors. You have to elaborate on sensory receptors.
Analyze the entrepreneurial mind-set in the corporate world : Describe Corporate Entrepreneurship and analyze the entrepreneurial Mind-Set in the corporate world.
What is the concentration of the unknown h3po4 solution : What is the concentration of the unknown H3PO4 solution? The neutralization reaction is  H3PO4(aq) + 3NaOH(aq) → 3H2O(l) + Na3PO4(aq)
Calculate the cross elasticity of lorenas demand for golf : Calculate the cross elasticity of Lorena's demand for golf at all two prices. Are movies and golf substitutes, complements or independent goods?
Differenciate between saturated and unsaturated fats : Differenciate between saturated and unsaturated fats?
What is movement of cell against concentration : What is movement of cell against concentration gradient is called osmosis active transport
Compound and simple leaves of the plants : What is the diffrence between compound and simple leaves of the plants
Give relevant examples in plants : What is placentation and give give relevant examples in plants

Reviews

Write a Review

 

Business Economics Questions & Answers

  The long-run aggregate supply curve can never shift

Evaluate whether each of the following statements is true or false. Explain your answer and provide supporting rationale. The short-run aggregate supply (SAS) curve slopes upward because households spend more as their incomes increase. The long-run a..

  Off saving money or spending money

In your opinion, are you better off saving money or spending money? Why? Please explain? Then take the question from a more macroeconomic perspective...does your spending or saving make the economy as a whole better off (and thus indirectly you)? How..

  Personal consumption expenditures-transfer payments

Exhibit 5-5 GDP data (billions of dollars) Personal consumption expenditures $5,207 Interest 425 Corporate profits 735 Government spending 1,406 Depreciation 830 Rental income 146 Gross private domestic investment 1,116 Compensation of employees 4,42..

  Explain difference between biases and framing effects

Describe the foreign currency and home currency approaches to capital budgeting for a foreign project. Clearly bring out the differences between the two approaches. Which is better and why? The textbook describes the field of Behavioral Finance as th..

  About the speakers experiences and feelings

In the poem Facing It by Yusef komunyakaa. Characterize the speaker of the voice you hear in the poem, what can you tell about the speakers experiences and feelings. How does the title fit the poem and the speaker? How does the last line fit?

  Return for stock

Evaluate the U.S. nursing shortage in terms of demand and supply.

  Is world welfare higher or lower

Explain how this tax affects the welfare of foreign consumers and producers. Is world welfare higher or lower? Explain.

  Two alternative projects-use an incremental ror analysis

There are two alternative projects to be chosen: project A has a first cost of $110,000 and an annual operating cost of $60,000. Project B has a first cost of $175,000 and an annual operating cost of $35,000. If the company uses a 3-year recovery per..

  Q1 suppose the required reserve ratio 20 and that a new

q1. suppose the required reserve ratio .20 and that a new 100 billion of reserves are injected into the system. by how

  Supply of cigarettes is elastic but not perfectly elastic

The demand for cigarettes is price inelastic, but not perfectly inelastic. The supply of cigarettes is elastic, but not perfectly elastic. If there were no price controls or other complicating regulations, what would a model of supply and demand ther..

  Injunction to stop the factory from making noise

Al owns a shoe factory with noisy machines which disturb his neighbor Bob. What is the efficient outcome – for the factory to shut down, to run silently, or to run noisily? Suppose Bob was granted an injunction to stop the factory from making noise.

  Calculate the marginal revenue of good

The price elasticity of demand for good A is -1.0.And the price of good A is 2 million dollars. Calculate the Marginal Revenue of good A when the price is 2 million

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd