Macroeconomics Answers

Demand for Magnum Ice Cream is given by an equation as Q = 70 – 10P + 4 Px + 50 I  

Where, Q = Quantity of Magnum demanded, P = Price of Magnum Ice Cream, Px = Price of Walls Ice Cream, I = Per Capita Income

a.      Assume P = Rs 100, Px = Rs 120 and I = Rs 25 (Rs in thousands).  

Calculate        

(i)                Price Elasticity of Demand

(ii)             Cross Price Elasticity of Demand

(iii)           Income Elasticity of Demand

b.     How the elasticity does estimates help in managerial decision making?  

Prices would be reduced by an average of 15 percent on 300 items, including alcohol. Some items (popcorn, bottled water, and soda) would be reduced in price by as much as 25 percent. Season-ticket holders would retain their additional 25 percent discount on top of those reductions. event venues are well-known for high priced food and drinks, the Tampa Bay Lightning are not unique in this change to low-priced concessions. The Atlanta Falcons lowered their concession prices by 50 percent, and improved food quality, in 2016. , the owners reported a 16 percent increase in concession sales revenue and an 88 percent increase in merchandise sales. The move was so successful they reduced prices again in 2019. While other franchises are slow to follow suit, if the success of these moves is sustained, it may not be long until there is a new paradigm in stadium pricing.:Q 1. Given that revenues increased when concession prices fell, what can you say about the price elasticity of demand for stadium food?

What impact do you expect this to have on ticket sales? Use supply and demand analysis to predict how ticket prices might be affected. (Assume supply is perfectly inelastic.) 

. Merchandise sales also increased after food prices fell. Is the cross-price elasticity of demand between food and merchandise positive or negative? 

 Given that revenues increased when concession prices fell, what can you say about the price elasticity of demand for stadium food?

Why is importation restricted despite the benefits of import to an economy

Which one of the following statements is correct?

a. Production will only increase in response to an increase in expenditure (demand) if the price level decreases.

b. Higher oil price’s will result in a leftward shift of the AD,ASSR, ASLR curves

c. When actual prices are higher than expected prices, the ASSR curve will eventually shift to the right

d. Structural unemployment is due to certain number of people who are in the process of changing jobs or careers

Which one of the following statements is correct?

(a) Data from the US has never shown a deviation from the PC relationship of inflation and unemployment

(b) The AD-AS model cannot be adapted for a inflationary context

(c) It is not possible to illustrate an inflationary environment in the AS-AD model using the P-Y plane.

(d) The short-run AS curve is a mirror image of the Phillips curve

Which one of the following statements is correct?

(a) When expected prices A larger Then actual prices, Wages eventually increase

(b) An increase in government expenditure will result in the AD curve shifting to the left.

(c) The AD curve has a positive slope

(d) if expected prices are larger than actual prices, the wages will decrease as price expectations are adjusted.

Assume a simple closed economy without exports and imports. autonomous consumption expenditure is 50 billion. The marginal propensity to consume is 0.6 desired investement is 10 billion and govt pirchase is 20 billion.

Write a mathematical equation expressing Savings as a function os disposable income ?