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Author Question: For each pair of items below determine which product would have the higher price elasticity of ... (Read 56 times)

dejastew

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For each pair of items below determine which product would have the higher price elasticity of demand (in absolute value).
 
  a. Insulin for a diabetic or aspirin for someone suffering a headache.
  b. A new Whirlpool 27 cu.ft. side-by-side refrigerator or electricity to power your all-electric home.
  c. A can of Red Bull or soft drinks in general.

Question 2

Stafford loans are student loans that the federal government provides to graduate and undergraduate students to fund their education. Stafford loans can be extended up to 30 years.
 
  The Congressional Budget Office (CBO) calculates the cost of these loans by discounting the future cash flows from the loan using the interest rate on the 30-year Treasury bond. The risk of default on the 30-year Treasury bond is extremely low. In contrast, over the life of a Stafford loan, on average about 20 of the amount due is never repaid. What do you think are the implications of using the yield on the 30-year bond to calculate the cost of student loans?


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srodz

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dejastew

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Reply 2 on: Jun 29, 2018
:D TYSM


ryhom

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Reply 3 on: Yesterday
Excellent

 

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