PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
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Chapter 12, Problem 5P
To determine
The missing numbers in the table.
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While the major economies slid into recession and industries suffered great losses to the COVID-19 pandemic, E-commerce sales saw explosive growth. In this rapid movement of consumers to online purchasing and delivery services, there has been a large increase in the demand for packaging materials, such as cardboard boxes. Supporting this, Parcel Shipping Index by Pitney Bowes Inc. (2020) finds global parcel volume exceeding 131 billion, a 27% increase from 2019. Corrugated cardboards are largely and versatilely used for secondary packaging of goods, up to the tertiary packaging of large packs into mass cargo (Saxon Packaging, 2020). In addition to its relatively low cost, its strength and durability are also remarkable in protecting a variety of products from damage, notably during the shipment process. Given this, businesses have been largely reliant on the material as a practical, secure, and sustainable way of containing their products from production centers to…
Presented below in the table are the average household weekly expenditure ($) on the selected
major commodity groups and the total household expenditure on all goods and services by the age
of head of households' in Australia in 2015-16. Using the information provided, choose any two
commodity groups to analyze the patterns of consumption of these commodity groups by
households at different stages of the life cycle. You are expected to apply appropriate concepts and
calculate appropriate indicators of consumer preferences in your analysis. Your response should be
no more than 200 words, excluding calculations.
Current housing costs
Alcoholic beverages
Medical care and health expenses
Communication
Education
Total expenditure on all goods and
services
Average household weekly expenditure (S)
by age of household heads
15-24 25-34 35-44 45-54 55-64 65+
303
34
29
67
63
379
33
61
55
36
1,268 1,492
399
31
82
47
61
1,716
307
41
93
54
92
225
38
102
49
23
1,757 1.459
132
20
81
33
9
887
All…
The figure below shows the average share of total household expenses for a good and the inflation-adjusted price of the same good. The share of all expenses line is calculated as expenditures on this good (that is the price of this good multiplied by the quantity of this good purchased) divided by total household expenses. This line shows how expenditures on this good changes over time, holding total spending constant. The other line is the price of this good adjusted for inflation (i.e., the increase in the price level for all goods). The specific units are obscured on purpose.
Use these data to characterize the price elasticity of demand. Explain using the definitions of price elasticity of demand and total expenditure. Notice that I am not asking you to calculate the price elasticity of demand. Use the data to talk about the size of price elasticity of demand in general terms. Is demand elastic or inelastic? Is the price elasticity of demand very large? Very small? Close to 1?…
Chapter 12 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
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