Solution: A typical consumer behaved in the following manner with respect to purchases of butter over the past eight years: Year Price of butter $/pound
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 |
Butter Demand |
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, income, and cross elasticity coefficients. (Remember that the effects of other factors need to be held constant when computing any one of these coefficients.)
Deliverable: Word Document 
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