Price Admission

Question 1

All questions must be answered in details

ELASTICITY

1. Suppose that Bill’s Thrift Mart annual Founder’s Day sale, when all prices in the store are reduced by 50%, results in its sales doubling compared to a typical day. (a) What is Thrift Mart’s price elasticity of demand? (b) Is the Founder’s Day sale a good idea for the store?

2. List three examples of an inferior good (not discussed in class or in the text). Justify your choice of examples.

3. How responsive are your grades to a change in the amount of studying you do? For example, if you increased your study time by 25%, how would your grades respond? State these estimates as elasticities. Are your estimates high or low? Would it be worth your while to study more for each class? Explain.

4. Jumping Joe’s Night Club has found that when they offer half price admission to the club on Wednesday nights (when business is typically slow), their total revenue rises. (a) Is their demand elastic? Explain. (b) Is it a good idea for them to continue with this promotion? Why?

5. Absolut Vodka ran the same advertising campaign for about 20 or 30 years. What must the company have believed to be its advertising elasticity of demand? Explain.

7. The elasticity of demand for Dave’s Famous is Pizza is 2.6. Dave is considering raising pizza prices by 20%. Is this a good idea? What will happen to his sales? His total revenue? Explain.

Question 2

Write a 1,050- to 1,400-word paper about The Federal Reserve’s structure and functions.

Describe the Federal Reserve’s structure and primary functions.

Explain the effect the Federal Reserve’s policies have on financial markets, institutions and interest rates.

Access the Federal Reserve Economic data web page:  In the At a Glance frame near the bottom of the page you will find eight data series. List all eight series of data and explain what the data portrays and its importance.

Format your paper consistent with APA guidelines.

Click the Assignment Files tab to submit your assignment as a Microsoft® Word document.

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