Question

Economists have observed that spending on restaurant meals declines more during economic downturns than does spending...

Economists have observed that spending on restaurant meals declines more during economic downturns than does spending on food to be eaten at home. How might the concept of elasticities help explain this?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Elasticity refers to the responsiveness of quantity demanded with changes in the price or income. When demand is income elastic, the % change in quantity is higher than the % change in income. On the other hand, when demand is income inelastic, the % change in quantity is lower than the % change income. The income elasticity of restaurant food is higher than the income elasticity of home food. This is why income falls due to recession, the spending on restaurant meals falls higher than the spending on home food.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
8)   One way to sidestep the debate over whether the government should increase spending during economic...
8)   One way to sidestep the debate over whether the government should increase spending during economic downturns is to: A)   return to the gold standard so that the value of the U.S. dollar remains strong. B)   identify projects that nearly everyone can agree the government should fund. C)   cut government spending so the government has no ability to spend money. D)   raise taxes so that the government has the money it needs for additional spending. 9)   If Al has an...
Q2: Some economists suspect that one of the reasons that economies in developing countries grow so...
Q2: Some economists suspect that one of the reasons that economies in developing countries grow so slowly is that they do not have well-developed financial markets. Does this argument make sense? Q3. When interest rates fall, how might you change your economic behavior? Q4: Why are financial markets important to the health of the economy? Q5: When the American dollar worth more in relation to currencies of other countries, would an American be more likely to buy American-made or foreign-made...
Q1: Define money and explain the important functions of money? Q2: Some economists suspect that one...
Q1: Define money and explain the important functions of money? Q2: Some economists suspect that one of the reasons that economies in developing countries grow so slowly is that they do not have well-developed financial markets. Does this argument make sense? Q3. When interest rates fall, how might you change your economic behavior? Q4: Why are financial markets important to the health of the economy? Q5: When the American dollar worth more in relation to currencies of other countries, would...
Q1: Define money and explain the important functions of money? Q2: Some economists suspect that one...
Q1: Define money and explain the important functions of money? Q2: Some economists suspect that one of the reasons that economies in developing countries grow so slowly is that they do not have well-developed financial markets. Does this argument make sense? Q3. When interest rates fall, how might you change your economic behavior? Q4: Why are financial markets important to the health of the economy? Q5: When the American dollar worth more in relation to currencies of other countries, would...
1) We have assumed that the unknown does not dissociate into more than one particle when...
1) We have assumed that the unknown does not dissociate into more than one particle when dissolved. If this was an incorrect assumption and the solid did dissociate slightly. Then how would the calculated molar mass of solute from our experiment differ from the actual molar mass? The calculated would be (too high, too low or unaffected) compared to the actual? Explain briefly. 2)If you measured the experimental freezing point of 30g cyclohexane with 0.012mols of Toluene (MWT= 92.15) and...
1) We have assumed that the unknown does not dissociate into more than one particle when...
1) We have assumed that the unknown does not dissociate into more than one particle when dissolved. If this was an incorrect assumption and the solid did dissociate slightly. Then how would the calculated molar mass of solute from our experiment differ from the actual molar mass? The calculated would be (too high, too low or unaffected) compared to the actual? Explain briefly. 2)If you measured the experimental freezing point of 30g cyclohexane with 0.012mols of Toluene (MWT= 92.15) and...
1) We have assumed that the unknown does not dissociate into more than one particle when...
1) We have assumed that the unknown does not dissociate into more than one particle when dissolved. If this was an incorrect assumption and the solid did dissociate slightly. Then how would the calculated molar mass of solute from our experiment differ from the actual molar mass? The calculated would be (too high, too low or unaffected) compared to the actual? Explain briefly. 2)If you measured the experimental freezing point of 30g cyclohexane with 0.012mols of Toluene (MWT= 92.15) and...
1) We have assumed that the unknown does not dissociate into more than one particle when...
1) We have assumed that the unknown does not dissociate into more than one particle when dissolved. If this was an incorrect assumption and the solid did dissociate slightly. Then how would the calculated molar mass of solute from our experiment differ from the actual molar mass? The calculated would be (too high, too low or unaffected) compared to the actual? Explain briefly. 2)If you measured the experimental freezing point of 30g cyclohexane with 0.012mols of Toluene (MWT= 92.15) and...
In a newly published article in the scientific journal “International Economic Review”, some authors study how...
In a newly published article in the scientific journal “International Economic Review”, some authors study how carbon taxation could help reducing the climate change problem. They find that: Carbon taxation is mostly studied in social planner or infinitely‐lived‐agent models, which obscure carbon taxation's potential to produce a generational win win. This paper's large‐scale, dynamic 55‐period, overlapping generations model calculates the carbon‐tax policy delivering the highest uniform welfare gain to all current and future generations. Our model features coal, oil, and...
      MK Restaurant: Branding of Thai-Style Hotpot The restaurant industry is one of the most...
      MK Restaurant: Branding of Thai-Style Hotpot The restaurant industry is one of the most competitive in Thailand. With a large number of players ranging from restaurants in five-star hotels, global fast-food chains to small stalls along the streets and everything in between, the Thais are spoiled for choice. In addition, as the world becomes globalized, consumers are familiar with international dishes and would not hesitate to try new offerings from the other side of the globe. As a...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT