If a researcher decides to undertake a study to verify the general preposition that as incomes rise, the consumption of inferior goods falls, which type of economic study and what analysis is this? Justify your answer.
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It is an established fact in economics that for goods which are described as inferior goods, when incomes of consumers increase, consumers tend to reduce their consumption of such goods and rather patronize goods which would normally provide higher satisfaction .If a researcher decides to undertake a study to verify the general preposition that as incomes rise, the consumption of inferior goods falls, which type of economic study and what analysis is this? Justify your answer.
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- If in the study results obtained a demand and supply model for ties and suits: Demand for tie: Qdt = 410 – 5Pt – 2Ps Supply of tie: Qst = – 60 + 3Pt Demand for suit: Qds= 295 – Pt – 3Ps Supply of suit: Qss=–120 + 2Ps Based on the estimation results, then: a. Determine the general equilibrium price of a tie and suit b. What is the type of relationship between a tie and a suit? Explain your argumentSuppose that the government tends to maximize the tax revenue. How would the cannabis price drop affect the government tax revenue if cannabis was taxed by price? Did the government anticipate the cannabis price drop when designing the tax scheme? You may come up with an artificial numerical example to support your findings. are alcohol and cigarettes substitutes or complements of cannabis?(The answer to this question depends on the actual consumption data. If you do not know the data, you may make an assumption. Then, you should stick with this assumption for the rest of your analysis. For example, if you assume that alcohol and cigarettes are substitutes of cannabis, then your entire analysis is based upon this assumption.) How would the change in the price of cannabis possibly affect the market demand curve for alcohol/cigarettes?When trying to assess differences in her customers, Claire—the owner of Claire’s Rose Boutique—noticed a difference between the typical demand of her female versus her male customers. In particular, she found her female customers to be more price sensitive in general. After conducting some sales analysis, she determined that her female customers have the following demand curve for roses: QF = 24 − 2P. Here, QF is the quantity of roses demanded by a female customer and P is the price charged per rose. She determined that her male customers have the following demand curve for roses: QM = 27 − P. Here, QM is the quantity of roses demanded by a male customer. If two unaffiliated customers walk into her boutique, one male and one female, determine the demand curve for these two customers combined (i.e., what is their aggregate demand?).
- A tax on Cigarettes introduced in Mexico in 2012 increased the price of Cigarettes by about 10%. An evaluation of the first two years of this measure found that Cigarette consumption fell on average by 7.6%, with a larger decrease (11.7%) in low income households. The study also estimated an increase in consumption of alternatives to smoking, particularly Nicotine patches, of 2.1% (AYA, 2017) Explain factors that determine responsiveness to a price increase. Which of these factors might explain the difference in the economy and low income households?Suppose that News Corp., which controls the United States’ largest satellite-to-TV broadcaster, is contemplating launching a Spaceway satellite that could provide highspeed Internet service. Prior to launching the Spaceway satellite, suppose that News Corp. used least squares to estimate the regression line of demand for satellite Internet services. The best-fitting results indicate that demand is Qsatd = 152.5 − .8Psat + 1.2PDSL + .5Pcable (in thousands), where Psat is the price of satellite Internet service, PDSLis the price of DSL Internet service, and Pcable is the price of high-speed cable Internet service. Suppose that after the FCC’s ruling the price of DSL, PDSL, is $25 per month and the monthly price of high-speed cable Internet, Pcable, is $50. Furthermore, News Corp. has identified that its monthly revenues need to be at least $15 million to cover its monthly costs. If News Corp. set its monthly subscription price for satellite Internet service at $55, would its revenue be…Suppose that News Corp., which controls the United States’ largest satellite-to-TV broadcaster, is contemplating launching a Spaceway satellite that could provide highspeed Internet service. Prior to launching the Spaceway satellite, suppose that News Corp. used least squares to estimate the regression line of demand for satellite Internet services. The best-fitting results indicate that demand is Qdsat = 152.5 − .8Psat +1.2PDSL + .5Pcable (in thousands), where Psat is the price of satellite Internet service, PDSL is the price of DSL Internet service, and Pcable is the price of high-speed cable Internet service. Suppose that after the FCC’s ruling the price of DSL, PDSL, is $25 per month and the monthly price of high-speed cable Internet, Pcable, is $50. Furthermore, News Corp. has identified that its monthly revenues need to be at least $15 million to cover its monthly costs. If News Corp. set its monthly subscription price for satellite Internet service at $55, would its revenue be…
- The following data pertain to products A and B, both of which are purchased by Madame X. Initially, the prices of the products and quantities consumed are: PA = $10, QA = 3, PB = $10, QB = 7. Madame X has $100 to spend per time period. After a reduction in price of B, the prices and quantities consumed are: PA = $10, QA = 2.5, PB = $5, QB = 15. Assume that Madame X maximizes utility under both price conditions above. Also, note that if after the price reduction enough income were taken away from Madame X to put her back on the original indifference curve, she would consume this combination of A and B: QA = 1.5, QB = 9 Determine the change in consumption rate of good B due to (1) the substitution effect and (2) the income effect. Determine if product B is a normal, inferior, or Giffen good. Explain.GM’s Food Shops has completed a study of weekly demand for its “new-fashioned” tacos in 53 regional markets. The study revealed that where Q is the number of tacos sold per store per week, A is the level of local advertising expenditure, Pop denotes the local population (in thousands), and Pr is the average taco price of local competitors. For the typical GM’s outlet, P = P1.50, A = P1,000, Pop = 40, and Pr = P1. Q = 400 - 1,200P + 0.8A + 55Pop + 800Pr Estimate the weekly sales for the typical GM’s outlet. Determine the equilibrium price and equilibrium quantity, if supply is Qs = 700 + 1,200P considering the general demand function of GM’s outlet Should GM raise its taco prices? Why or why not?The multivariate demand function below will be needed for questions 12-18. Setting: Grapple, Inc. is a leading seller of laptop personal computers. However, they want to become a leading tablet seller, too. Your marketing department, aided by your economics staff, has estimated a function to help you in the quest for market leader in tablets. The variables are defined after the function. Qg = the number of Grapple tablet computers demanded per week. Pg = the price of each new Grapple tablet (in $). Ph = the price of each Hewpaq tablet (in $). Pr = the price of each Ronova tablet. Pdv = the price to equip a tablet with Holographic digital video (in $, this is an upgrade option that enables three-dimensional graphics on a tablet. Two-dimensional graphics is standard equipment). Psc = the price of various screen sizes (in $, a 8 inch is standard, but upgrade options are 10 inch extra sharp, 12 inch, 12 inch extra sharp, Each also has a touch-screen option. The upgrades…
- Consider the following scenario. A sports economist has collected data to test the relationship between shot quality and points per game for a sample of NBA players. The data is a panel dataset comprised of 2,000 NBA players with season-level performance statistics over the past 50 NBA seasons. The sports economist is worried that the player's primary playing position might be correlated with both shot quality and points per game, and position is easy to measure. However, historical changes in analytics have influenced the types of shots players across the league have taken over time, and these changes are generally difficult to quantify. To address the potential omitted variable bias that could arise because of this, the economist should include in their regression: Time fixed effects O Neither time nor entity fixed effects Both time and entity fixed effects O Entity fixed effectsSuppose that News Corp., which controls the United States’ largest satellite-to-TV broadcaster, is contemplating launching a Spaceway satellite that could provide high speed Internet service. Prior to launching the Spaceway satellite, suppose that News Corp. used least squares to estimate the regression line of demand for satellite Internet services. The best-fitting results indicate that demand is Qdsat = 152.5 - 0.8Psat + 1.2PDSL + 0.5Pcable (in thousands), where Psat is the price of satellite Internet service, PDSL is the price of DSL Internet service, and Pcable is the price of high-speed cable Internet service.Suppose that after the FCC’s ruling the price of DSL, PDSL, is $25 per month and the monthly price of high-speed cable Internet, Pcable, is $50. Furthermore, News Corp. has identified that its monthly revenues need to be at least $15 million to cover its monthly costs. If News Corp. set its monthly subscription price for satellite Internet service at $55, how much revenue…According to studies undertaken by the U.S. Department of Agriculture, the price elasticity of demand for cigarettes is between −0.3 and −0.4 and the income elasticity is about +0.5. Suppose Congress, influenced by studies linking cigarette smoking to cancer, plans to raise the excise tax on cigarettes so the price rises by 10 percent. Estimate the effect the price increase will have on cigarette consumption and consumer spending on cigarettes (in percentage terms).