Income elasticities of demand for six types of public good

Assignment Help Business Economics

Reference no: EM13868663

In a study published in 1980, B. B. Gibson estimated the following price and income elasticities of demand for six types of public goods:

State Activity Price Income
Elasticity Elasticity
Aid to needy people −0.83 0.26
Pollution control −0.99 0.77
Colleges and universities −0.87 0.92
Elementary school aid −1.16 1.14
Parks and recreational areas −1.02 1.06
Highway construction and −1.09 0.99
maintenance

(a) Do these public goods conform to the law of demand? For which public goods is demand price elastic?

(b) What types of goods are these public goods?

(c) If the price or cost of college and university education increased by 10 percent and, at the same time, incomes also increased by 10 percent, what would be the change in the demand for college and university education?

Reference no: EM13868663

Questions Cloud

What are the profit variance revenue variance and cost : What are the profit variance, revenue variance, and cost variance?

Why does nation experience increasing opportunity cost : Why does a nation experience increasing opportunity cost?

Which ?rms would choose to adopt the new technology : Could it be pro?t maximizing for some ?rms to adopt the new technology but not pro?t maximizing for other ?rms to adopt that same technology? Which ?rms would choose to adopt the new technology?

Determined that the price elasticity of demand for beer : A restaurant/bar is analyzing its pricing of beer. It has determined that the price elasticity of demand for beer is −0.8; the cross-price elasticity for wine with respect to the price of beer is 0.9; What is the restaurant's profit (prior to the pri..

Income elasticities of demand for six types of public good : In a study published in 1980, B. B. Gibson estimated the following price and income elasticities of demand for six types of public goods: Do these public goods conform to the law of demand? For which public goods is demand price elastic? What types o..

How is number of ?rms competing in particular market affect : How would the number of ?rms competing in a particular market affect the likelihood that an exporter to that market would be accused of dumping?

Prepare a schedule of cost of goods manufactured : Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in good form.

Researcher estimated that price elasticity of demand : A researcher estimated that the price elasticity of demand for automobiles in the United States is -1.2, while the income elasticity of demand is 3.0. Next year, U.S. if sales of domestically produced automobiles do expect U.S auto makers to sell nex..

Take steps to eliminate its operating deficit : The total operating revenues of a public transportation authority are $100 million while its total operating costs are $120 million. The price of a ride is $1 and the price elasticity of demand for public transportation has been estimated to be -0.4...

User Account

All Pages