Consider a hypothetical consumer richard who spends all his

Reference no: EM13379204

Consider a hypothetical consumer, Richard, who spends all his income on two food items: pizzas and burritos:

a) If Richard spends 40% of his income on burritos and his income elasticity of demand for burritos is 2, what is his income elasticity of demand for pizzas?

b) Whenever the price of any of the goods increase, Richard gives a call to his rich uncle who immediately transfers funds to him so that Richard's utility remains constant. Assume the price of burritos increased by 20%, and even after Richard is compensated by his uncle, his demand for burritos declined by 20%. What is Richard's ordinary (Walrashian) price elasticity of demand for burritos?

Reference no: EM13379204

Questions Cloud

Suppose the demand for baseballs is given by q 200 - 8pa : suppose the demand for baseballs is given by q 200 - 8p.a what is the price elasticity of demand when p 6?b at what

The bank issues a letter of credit to one of its corporate : the bank issues a letter of credit to one of its corporate clients. what is the immediate impact on the equity ratio?

Environmental factors and human activity choose one of the : environmental factors and human activity choose one of the following options - all submissions must conform to the

Points on demand curve priceper ounce quantity : points on demand curve priceper ounce quantity ounces per showd

Consider a hypothetical consumer richard who spends all his : consider a hypothetical consumer richard who spends all his income on two food items pizzas and burritosa if richard

1 suppose honey is produced in a beehive using bees and : 1. suppose honey is produced in a beehive using bees and sugar. each honey producer uses one beehive which she rents

Reserve requirement for banks is set at 5 your firm : reserve requirement for banks is set at 5. your firm withdraws 42000 on its line of credit at the security bank to

Ups freight plans to spend 100 million on new long-haul : ups freight plans to spend 100 million on new long-haul tractor-trailers. some of these vehicles will include a new

Part a 1 company a wants to discourage unionization through : part a 1 company a wants to discourage unionization through the united technical workers of america. true or false in

User Account

All Pages