Business 620 Critical Thinking Two Salvatore ’ s Chapter 4 : Discussion Questions : 8 and 10 , 11 . Problems : 3 ( a ) and ( b ), 7 , 9 , and 14 , 15 . Froeb et al .’ s Chapter 6 : Individual problems : 6-1 , 6-3 , and 6-5 . Salvatore ’ s Chapter 5 : Problems : 8 , 15 ( b ) and ( c ), and appendix problem 2 ( p . 215 ).
Discussion Question 8 : If the price increase by 10 percent by how much does the quantity of household
a ) natural gas and
b ) electricity change in the short run and the long run ? ( Hint : use the price-elasticity values ).
Discussion Question 10 : Agricultural commodities are known to have a price-inelastic demand and to be necessities . How can this information allow us to explain why the income of farmers falls
a ) After a good harvest ? b ) In relation to the incomes in other sectors of the economy ? Discussion Questions : 11 .
Suppose that the cross-price elasticity of demand between McIntosh and Golden Delicious apples is 0.8 between apples and apple juice is 0.5 between apples and cheese is -0.4 and between apples and beer is 0.1 what can you say about the relationship between each set of commodities