the question: Recently, there was a price increase in petrol fuel and cigarettes in the UAE....

the question: Recently, there was a price increase in petrol fuel and cigarettes in the UAE. Suppose the prices of both of these goods rose by 15%, for which good does the quantity drop the most? why? use economics terminologies to explain.

Expert Solution

Rahul Sunny answered 1 year ago

a. Suppose that a 20 percent increase in the price of jet fuel causes a 5...

a. Suppose that a 20 percent increase in the price of jet fuel causes a 5 percent decrease in the consumption of jet fuel. What is the price elasticity of demand and do you think this is a realistic number? Explain why (hint: discuss the determinants of elasticity). b. In a recent fare war, WestJet reduced the price of its one-way airfare from Vancouver to Winnipeg from $198 to $138 to match Air Canada. WestJet matched the fare reluctantly, saying...

Studies indicate that the price elasticity of demand for cigarettes is about 0.4. Government can increase...

Studies indicate that the price elasticity of demand for cigarettes is about 0.4. Government can increase the price of a pack of cigarettes by increasing the cigarette tax. If a pack of cigarettes currently costs $5, and government wants to reduce smoking by 20%, how much should the price increase? Please explain.

If the price elasticity of demand for cigarettes is –0.50 and the price of cigarettes increases 10%, the quantity demanded of cigarettes decreases by 50%.

True or False?If the price elasticity of demand for cigarettes is –0.50 and the price of cigarettes increases 10%, the quantity demanded of cigarettes decreases by 50%.

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A garage sells three types of fuel: unleaded petrol, diesel and tractor diesel. The probability that a randomly selected customer will buy a particular fuel is shown in the table: Fuel Probability Unleaded 0.40 Diesel 0.45 Tractor Diesel 0.15 1. Find the probability that of two randomly selected customers: (i) Both will buy diesel (ii) Exactly one will buy diesel 2. Find the probability that of three randomly selected customers: (i) All will buy unleaded (ii) Exactly two will buy...

The owner of a petrol station wants to study fuel-purchasing habits of motorists at his station....

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QUESTION A) In the UAE based on UAE laws, explain with an example the circumstances under...

QUESTION A) In the UAE based on UAE laws, explain with an example the circumstances under which a buyer is in breach of a sales contract. ( ANSWER IN 7 LINES ) (B) In the UAE based on UAE laws, explain with an example the circumstances under which a seller is in breach of a sales contract ( ANSWER IN 7 LINES)

Question 5 LGP sells bottled gas to petrol stations for resale. The petrol stations buy the...

Question 5 LGP sells bottled gas to petrol stations for resale. The petrol stations buy the bottles in lots of 500 for $15000. LPG’s variable costs per bottle are $25. Monthly fixed costs are $102,000. Required 1. Calculate the breakeven point in sales revenue and units (gas bottles). 2. Calculate the volume required to earn $300,000. 3. How does your analysis change if you learn that LPG uses sales agents who are paid a commission of $0.50 per gas bottle sold? Question 6...

A study was performed to test whether cars get better fuel consumption on premium petrol than...

A study was performed to test whether cars get better fuel consumption on premium petrol than on regular petrol. Each of ten 6-cylinder cars was first filled with either regular or premium, decided by a coin toss, and the fuel consumption for that tank was recorded. The consumption was recorded again for the same cars using the other kind of petrol. A lower fuel consumption figure in litres/100km is better fuel consumption A second test was conducted using ten 4-cylinder...

Background Information: A tax on Cigarettes introduced in Mexico in 2012 increased the price of Cigarettes...

Background Information: A tax on Cigarettes introduced in Mexico in 2012 increased the price of Cigarettes by about 10%. An evaluation of the first two years of this measure found that Cigarette consumption fell on average by 7.6%, with a larger decrease (11.7%) in low income households. The study also estimated an increase in consumption of alternatives to smoking, particularly Nicotine patches, of 2.1% (AYA, 2017) Question 1: Draw a demand and supply diagram for the market for Cigarettes. Name...

If the price of petrol drops in Australia during COVID19. What will happen to demand and...

If the price of petrol drops in Australia during COVID19. What will happen to demand and supply?

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