Instant Download Microsoft Word Current 2014-15 The entire course study guide includes the homework solutions in word format for ETH 557 (bachelors program). Your tutorial will include these files: Just shoot us an email or contact us via live chat. Our expert ETH tutors will add the answers to the study guide within 1 day. You will receive a free update to the study guide with the answers you need. Yes, this guide is designed to help students get through the Week 2 Assignment with ease. Research the elasticity of beef and eggs in regards to price changes. How do supply, demand, and price controls interact to affect equilibrium price of eggs? Why do customers have a more elastic buying response to beef than to eggs? What would be the consumer buying response to Coca-Cola® if the price of Pepsi® doubled? If the prices of Coca-Cola® and Pepsi® remained constant, what would be the consumer’s typical buying response to these products if their income was reduced by 30%? Suppose all carbonated beverages tripled in price. How would the concepts of utility, income, and substitution predict consumer behavior based on the rise in the cost of carbonated beverages?

The elasticity of beef and eggs refers to the sensitivity of consumer demand for these products in response to changes in their prices. Elasticity can be measured by the percentage change in quantity demanded divided by the percentage change in price. A greater elasticity indicates that consumers are more responsive to price changes.

Supply, demand, and price controls interact to affect the equilibrium price of eggs. In a free market, the equilibrium price is determined by the intersection of the demand and supply curves. If there is an increase in demand for eggs, the equilibrium price will rise. Similarly, if there is a decrease in supply, the equilibrium price will also rise. Price controls, such as government restrictions on prices, can disrupt the equilibrium by setting a price ceiling or floor. For example, if the government sets a price ceiling below the equilibrium price, it may lead to a shortage of eggs.

Customers tend to have a more elastic buying response to beef compared to eggs for several reasons. Firstly, beef is a relatively more expensive product compared to eggs, so a price change in beef is likely to have a larger impact on the consumer’s budget. Secondly, there are more substitutes available for beef, such as chicken or pork, which gives consumers greater flexibility to switch to alternative products if the price of beef increases. In contrast, eggs have fewer substitutes, making consumers less likely to switch to alternative products in response to a price change.

If the price of Pepsi doubled, the consumer buying response to Coca-Cola would depend on the relative prices of the two products and the elasticity of demand for Coca-Cola. If the price of Coca-Cola is lower than the new price of Pepsi, consumers may switch to Coca-Cola as a substitute, leading to an increase in demand for Coca-Cola. However, if the price of Coca-Cola is higher than the new price of Pepsi, consumers may choose to continue purchasing Pepsi or switch to other alternatives, resulting in a decrease in demand for Coca-Cola.

If the prices of Coca-Cola and Pepsi remained constant and the consumer’s income was reduced by 30%, their typical buying response would depend on the income elasticity of demand for these products. If both Coca-Cola and Pepsi are normal goods, a decrease in income would generally lead to a decrease in demand for these products. However, the magnitude of the decrease would depend on the income elasticity of demand. If these beverages are considered luxury goods, with an income elasticity greater than one, the decrease in demand may be more significant compared to if they are considered necessities with an income elasticity less than one.

If all carbonated beverages tripled in price, the concepts of utility, income, and substitution would predict that consumer behavior would change. The increase in price would likely lead to a decrease in the quantity demanded as consumers may find these beverages less affordable. Consumers may also consider alternative beverages or non-carbonated options, thus substituting their consumption. Additionally, if the increase in price disproportionately affects consumers with lower incomes, the decrease in demand may be more pronounced as they have less disposable income to spend on carbonated beverages.

In conclusion, the elasticity of beef and eggs determines the responsiveness of consumer demand to changes in their prices. Additionally, supply, demand, and price controls interact to affect the equilibrium price of eggs. Customers tend to have a more elastic buying response to beef compared to eggs due to factors such as price and the availability of substitutes. The consumer buying response to Coca-Cola® if the price of Pepsi® doubled would depend on the relative prices and the elasticity of demand. If the prices of Coca-Cola® and Pepsi® remained constant and the consumer’s income was reduced by 30%, their typical buying response would depend on the income elasticity of demand. Finally, the increase in the price of all carbonated beverages would likely result in a decrease in demand, with consumers substituting or reducing their consumption based on the concepts of utility, income, and substitution.

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