Question $3$: Elasticities

Use the table below to answer each of the following as well as provide a short explanation. Please be concise. None of the answers require more than a brief paragraph. A few sentences with an equation, calculation or diagram if appropriate is enough. A simple true or false with no explanation with receive no credit.

$\backslash$begin$\{$tabular$\}\{|$l$|$l$|$c$|\}$

$\backslash$hline $\backslash$multicolumn$\{1\}\{|$c$|\}\{$ Good $\}$ & $\backslash$multicolumn$\{1\}\{$c$|\}\{$ Elasticity Type $\}$ & $\backslash$begin$\{$tabular$\}\{$c$\}$

Elasticity $\backslash \backslash$

Value

$\backslash$end$\{$tabular$\}\backslash \backslash$

$\backslash$hline Bread & Own$-$price elasticity of demand & $-0\mathrm{.}4\backslash \backslash$

$\backslash$hline Cheese & Own$-$price elasticity of demand & $-1\mathrm{.}2\backslash \backslash$

$\backslash$hline Olive oil & Own$-$price elasticity of demand & $-1\mathrm{.}1\backslash \backslash$

$\backslash$hline Jam & Own$-$price elasticity of demand & $-0\mathrm{.}8\backslash \backslash$

$\backslash$hline Bread & Income elasticity of demand & $0\mathrm{.}1\backslash \backslash$

$\backslash$hline Cheese & Income elasticity of demand & $0\mathrm{.}4\backslash \backslash$

$\backslash$hline Olive oil & Income elasticity of demand & $0\mathrm{.}6\backslash \backslash$

$\backslash$hline Jam & Income elasticity of demand & $0\mathrm{.}3\backslash \backslash$

$\backslash$hline Cheese & Cross$-$price elasticity w$.$r$.$t$.$ Bread $($Cheese w$.$r$.$t$.$ B$.)$ & $-0\mathrm{.}05\backslash \backslash$

$\backslash$hline Bread & Cross$-$price elasticity w$.$r$.$t$.$ Cheese $($Bread w$.$r$.$t$.$ C$.)$ & $-0\mathrm{.}1\backslash \backslash$

$\backslash$hline Jam & Cross$-$price elasticity w$.$r$.$t$.$ Bread $($Jam w$.$r$.$t$.$ B$.)$ & $-0\mathrm{.}2\backslash \backslash$

$\backslash$hline Olive oil & Cross$-$price elasticity w$.$r$.$t$.$ Cheese $($Olive oil w$.$r$.$t$.$ C$.)$ & $0\mathrm{.}05\backslash \backslash$

$\backslash$hline Jam & Cross$-$price elasticity w$.$r$.$t$.$ Olive oil $($Jam w$.$r$.$t$.$ O$.)$ & $0\mathrm{.}1\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$

a$)(3$ points$)$ If the price of cheese rises by $\backslash (10\backslash \%\backslash ),$ cheese demand will fall by about $\backslash (12\backslash \%\backslash ).$ True or False? Briefly explain.

b$)(3$ points$)$ Compare bread and jam in terms of their price sensitivities$.$ A $\backslash (10\backslash \%\backslash )$ price increase in jam reduce jam's quantity demanded less $($in percentage terms$)$ than a $\backslash (10\backslash \%\backslash )$ price increase in bread reduces bread's quantity demanded? Briefly explain using the given elasticities.

c$)(3$ points$)$ If consumer incomes rise by $\backslash (10\backslash \%\backslash ),$ which product will experience the largest percentage increase in demand: bread, cheese, olive oil, or jam? Provide the approximate percentage change in that product's demand.

d$)(3$ points$)$ Suppose bread becomes more expensive by $\backslash (10\backslash \%\backslash ).$ Will this have a positive or negative impact on jam demand, and by approximately what percentage will jam demand change? Show your calculation.

e$)(3$ points$)$ If the price of cheese goes up by $\backslash (10\backslash \%\backslash ),$ will the demand for olive oil increase or decrease, and by approximately what percentage? Briefly explain.