Question

In the following questions, give all your answers to two decimals.

Patrice works as an economist for the Bureau of Labor Statistics (BLS). Her current project is to estimate the effect of changes in income, prices of related goods, and the price of potatoes on the demand for beef. Patrice has the following data:

Price elasticity of demand for beef	–0.80
Income elasticity of demand for beef	+ 1.40
Cross-price elasticity between beef and chicken	+1.20
Cross-price elasticity between beef and potatoes	–0.50

Suppose the price of beef falls by 10%. All else equal, the quantity of beef demanded would   by    %.

Part 2   (2 points)

If consumer income falls by 6%, the quantity of beef demanded would   by    %.

Part 3   (2 points)

If the price of chicken falls by 3%, the quantity of beef demanded would   by    %.

Part 4   (2 points)

If the price of potatoes falls by 10%, the quantity of beef demanded would   by    %.

Answer 1