Economics: Elasticity Theory – #263

Question: A typical consumer behaved in the following manner with respect to purchases of butter over the past eight years:

 Year Price of Butter ($/pound) Quantity of Butter Purchased Real Income ($) Price of Margarine (\$/pound) 1 0.95 200 11000 0.65 2 1.1 180 11000 0.65 3 1.1 190 11500 0.65 4 1.1 200 11500 0.9 5 1.15 170 11500 0.9 6 0.99 190 11500 0.9 7 0.99 175 10500 0.9 8 0.99 150 10500 0.65

Compute all meaningful price, incoMeand cross-elasticity coefficients. (Remember that the effects of the other factors need to be held constant when computing any of these coefficients).