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Chapter 19: Q.c - For Critical Thinking (page 426)

How do you think that reducing experimental subjects' stress would have affected their price elasticity of demand for alcohol?

Short Answer

Expert verified

As a purchaser is an alcoholic, he is a consumer of alcohol on a regular premise. Yet, as the customer is prompted by pressure, and the cost of liquor has expanded, it prompts the decrease in utilization by not exactly proportionate expansion in cost.

Step by step solution

01

Given Information

Presenting heavy consumers with momentary pressure made their ideal utilization of liquor become substantially less touchy to an expansion in the cost of liquor.

02

Explanation

Assuming an alcoholic is marked down with feelings of anxiety, interest in liquor will remain practically the same regardless of whether there is an expansion in cost level. Nonetheless, the corresponding reduction sought after for a drunkard is less when contrasted with expansion in cost.

The justification behind not as much as unit flexible interest bend is Habits. Commodities, which have become constant necessities for the shoppers, have less flexible interest bend.

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Most popular questions from this chapter

An increase in the market price of men's haircuts, from \(15per haircut to \)25per haircut, initially causes a local barbershop to have its employees work overtime to increase the number of daily haircuts provided from 35to45. When the $25 market price remains unchanged for several weeks and all other things remain equal as well, the barbershop hires additional employees and provides 65 haircuts per day. What is the short-run price elasticity of supply? What is the long-run price elasticity of supply?

The diagram below depicts the demand curve for "miniburgers" in a nationwide fast-food market. Use the information in this diagram to answer the questions that follow.

Quantity (mini burgers per day)

a. What is the price elasticity of demand along with the range of the demand curve between a price of \(0.20per miniburger and a price of role="math" localid="1651796932841" \)0.40per miniburger? Is demand elastic or inelastic over this range?

b. What is the price elasticity of demand along with the range of the demand curve between a price of \(0.80 per miniburger and a price of \)1.20 per miniburger? Is demand elastic or inelastic over this range?

c. What is the price elasticity of demand along with the range of the demand curve between a price of \(1.60 per miniburger and a price of \)1.80 per m ? Is demand elastic or inelastic over this range?

Table 19-2 indicates that the short-run price elasticity of demand for tires is 0.9. If an increase in the price of petroleum (used in producing tires) causes the market prices of tires to rise from \(50 to \)60, by what percentage would you expect the quantity of tires demanded to change?

How will the long-run adjustment of Egyptian cotton supply from elimination of the subsidy likely affect the number of suppliers - that is, Egyptian cotton farmers? Explain.

What do you suppose were the likely short-run adjustments to the removal of the cotton subsidy by Egyptian farmers who continued to devote all of their lands to agricultural crops?
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