General Elasticity Problems
A typical consumer behaved in the following manner with respect to purchases of butter over the past eight years:
|
Year |
Price of Butter ($/pound) |
Quantity of Butter Purchased |
Real Income ($) |
Price of Margarine ($/pound) |
|
1 |
0.95 |
200 |
11000 |
0.65 |
|
2 |
1.1 |
180 |
11000 |
0.65 |
|
3 |
1.1 |
190 |
11500 |
0.65 |
|
4 |
1.1 |
200 |
11500 |
0.9 |
|
5 |
1.15 |
170 |
11500 |
0.9 |
|
6 |
0.99 |
190 |
11500 |
0.9 |
|
7 |
0.99 |
175 |
10500 |
0.9 |
|
8 |
0.99 |
150 |
10500 |
0.65 |
Compute all meaningful price, income and cross-elasticity coefficients. (Remember that the effects of the other factors need to be held constant when computing any of these coefficients).
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