1. When the price of wheat rises from $2.34 to $2.46, some farmers switch crops, and the amount of barley offered on the market falls from 101 million bushels to 99 million. What is the cross elasticity of supply?
2. When the wage rate rose from $6.25 per hour to $6.75 per hour, employment in Fastfood, Inc. fell from 5,100 to 4,900. What is the price elasticity of demand for labor?
3. Explain why, when the price of good changes, the price elasticity of demand is likely to be higher or lower as a longer period of time elapses. Consider as an example the OPEC oil price increases in the 1970s.