Virtually everyone who lives there is of chinese heritage

Assignment Help Business Economics

Reference no: EM131392137

San Francisco’s Chinatown is one of the mostly densely populated places in the world…and virtually everyone who lives there is of Chinese heritage. Chinese culture, traditions, and language are actively taught to children who live in the area; most residents are bilingual. It is also a very popular tourist destination (some would even say “tourist trap”). Restaurants in Chinatown cater to both tourists and locals. Though the Chinese residents can all read English, menus are written in Chinese characters with English translations provided (usually on the other side of the menu). Though the menu items are translated properly, the prices on the Chinese side of the menu are often different than those in the English translation. There are two possibilities: (1) that the prices are systematically different (meaning that prices on one side are always higher than on the other side) or (2) the prices are merely different to reflect relative tastes of Chinese versus non-Chinese speaking patrons (meaning that some items are higher on one side of the menu while others are lower)? Explain why one of these answers cannot be correct. Then explain the correct answer using the concept of elasticity of demand and rationalize why the elasticities are as you claim.

Reference no: EM131392137

Questions Cloud

How does commercial bank increase the money supply : Discuss possible ways Greece can reduce its high unemployment rate. What are the three functions of money? Which function is the most important? What are the characteristics that something needs to possess in order to function as money? How does a co..

Price elasticity of demand for ice cream is elastic : Stable and predictable prices seem to be valued by retail customers, especially for items that enjoy a high degree of repeat sales. Show that Wal-Mart will sell more than 1000 of the smaller cartons of ice cream if the price elasticity of demand for ..

What is the cause of inflation : What is the cause of inflation? What does inflation do to the purchasing power of money? What are the likely impacts of a congestion tax predicted by economic theory? (could be a zone or other type of congestion tax) How does the most recent unemploy..

Using payoff matrix to determine the equilibrium outcome : Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell smart phones: Flashfone and Pictech. The game between Flashfone and Pictech is not an example of the prisoners' dilemma.

Virtually everyone who lives there is of chinese heritage : San Francisco’s Chinatown is one of the mostly densely populated places in the world…and virtually everyone who lives there is of Chinese heritage. Chinese culture, traditions, and language are actively taught to children who live in the area; most r..

Feasible set for economy and hypothetical optimal bundle : Consider, an economy, of 2 period households, with a growing population in which each person is endowed with y1 units of consumption when young, and y2 units when old. Draw the feasible set for this economy and hypothetical optimal bundle for this ec..

Explain how this is form of price discrimination : A university charges the same tuition and fees for students who take 12 credits per term as those who take 18 credits per term. Those who average 18 credits per term can easily graduate (obtain their baccalaureate degree) in 3½ years while those who ..

Field of managerial economics and globalization : Propose two (2) applications of the knowledge that you have learned in this course to your current or a future position. Provide a rationale for your response. Create a list of three (3) best practices to follow in the field of managerial economics a..

Linear tax affects outcomes in terms of output-work effort : Show how moving from a lump sum tax to a linear tax affects outcomes in terms of output and work effort. What is the effect on economic efficiency? How does your picture show this? You should use a linear PPF.

User Account

All Pages