You Are the Manager of a Supermarket, and Know That

question 33

Multiple Choice

You are the manager of a supermarket, and know that the income elasticity of peanut butter is exactly -0.7.Due to the recession, you expect incomes to drop by 15% next year.How should you adjust your purchase of peanut butter?

• A)Buy 10.5% more peanut butter.
• B)Buy 2.14% more peanut butter.
• C)Buy 6.2% less peanut butter.
• D)Buy 9.8% less peanut butter.

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Definitions:

Urban Sprawl

The uncontrolled expansion of urban areas into the surrounding countryside, often characterized by low-density residential development, increased reliance on personal vehicles, and loss of natural habitats.

Low-Cost Gasoline

Gasoline that is available at a lower price, often due to government subsidies, regional availability, or lessened environmental regulations.

Government-Funded Highways

Roads and transport routes built and maintained by the government using public funds.

Mass Transit

A system of large-scale public transportation in a city or metropolitan area, designed to move large numbers of people efficiently.