Suppose that during a given year
(1) the price of Tv sets increase by 4 percent in Japan,
(2) the dollar depreciate by 5 percent with respect to the yen (the Japanese currency),
(3) consumer incomes in the United States increased by 3 percent,
(4) the price elasticity of demand for imported TV sets in the United States is 1.5 and
(5) consumers’ income elasticity of demand for Tv Sets in the United States is 2,
(a) If the price of the imported Tv sets was $300 in the United States at the beginning of the year, approximately how much will you expect the price of the same imported TV sets to be in the United States at the end of the year?
(b) By how much would the quantity demanded of the imported Tv sets in the United States change as a result of the change in the price only?
(c) By how much would the demand of the imported TV sets in the United States change as a result of the increase in consumer income alone?
(d) By how much would the demand for the imported Tv sets in the United States change as a result of both the change in price and the incomes? Note: prepare it on excel sheet.
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