1)The government is concerned about high rates of unemployment. To spark hiring, it provides tax incentives for the businesses to invest in new capital projects and stimulate job growth. If the sole concern is adding jobs, use the Hicks-Marshall rules of derived demand to determine whether or not this will be an effective public policy. Are there any dangers?

2)Most demand and price elasticity studies in business required what type of price and quantity data?

a. time series

b. seasonally adjusted

c. cross-sectional

d. long term national sample.

3)How do you think retailers or sellers could use the concepts of "elasticity" in order to stimulate pre Holiday sales and sales throughout the rest of this year in 2016?

1)The governments of different economies are always concerned about the higher unemployment rate and to do so they proposed so many incentives and programs. The governments provide tax incentives for businesses to invest in new capital projects and stimulate job growth to increase employment.

The Hicks-Marshall rules of derived demand:

The law asserts that other things being equal, the own-wage elasticity of demand for a category of labor (skilled or unskilled) is high in an economy. These rules are combined with some strategic assumptions. According to these rules, the employers cannot easily replace workers, as doing so will lead to a large increase in other factor prices that must not be fruitful for the organization. Due to substitution and scale effect, investing in new capital projects needs big funds to acquire all inputs.

Based on the above description, we can conclude that the provision of tax incentives to businesses by the government in the form of economic policy would not be an effective policy.

2)Option c. is correct.

It is because cross sectional data is consisted of quantitative data about multiple variables at a particular point of time. Business while evaluating the elasticities of demand require data about various variables like income of the consumer, prices of other goods, taste and preferences, family distribution, number of stores located in consumer?s locality and so on.

Explanations of other options:

Options a, b, and d are incorrect.

It is because cross sectional data serves the business purpose by offering them information about wide variety of variables.

3)Retailers and sellers could adjust the prices of highly elastic products to stimulate sales in times of decreased demand. A small decrease in the price of an elastic good will increase demand substantially, which will increase sales. This strategy will not work as well, if at all, with inelastic goods. Instead, an increase in price for inelastic goods could help increase profits. Since the demand for inelastic goods will not change much with a change in price, it makes sense to increase the price to capture more profit, especially during non-peak times of the year.