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2. Suppose the income elasticity of demand for Good X is -0.3. What are the impacts on the equilibrium price and quantity of Good X if the incomes of the consumers of Good X fall? 3. In addition to the information in the question above, suppose you also know that the cross price elasticity between Good X and Good Y is +1.5. What are the impacts on the equilibrium price and quantity of Good X if the price of Good of Good X fall? increases at the same time that the incomes of the consumers

2. Suppose the income elasticity of demand for Good X is -0.3. What are the impacts on the equilibrium price and quantity of Good X if the incomes of the consumers of Good X fall? 3. In addition to the information in the question above, suppose you also know that the cross price elasticity between Good X and Good Y is +1.5. What are the impacts on the equilibrium price and quantity of Good X if the price of Good of Good X fall? increases at the same time that the incomes of the consumers

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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I need answers for second and third question please help
(would revenue increase or decrease)? Why? c. If the government permanently increases the price of cigarettes, will the policy have a larger effect on smoking one year from now or five years from now? d. Studies also find that teenagers have a higher price elasticity of demand than do adults. Why might thi be true? 2. Suppose the income elasticity of demand for Good X is -0.3. What are the impacts on the equilibrium price and quantity of Good X if the incomes of the consumers of Good X fall? 3. In addition to the information in the question above, suppose you also know that the cross price elasticity between Good X and Good Y is +1.5. What are the impacts on the equilibrium price and quantity of Good X if the price of Good Y increases at the same time that the incomes of the consumers of Good X fall? Multiple Choice There will likely be some multiple choice questions (in addition to short answer and essay questions) on the exams. Here are some sample multiple choice questions from old exams. 1. Which of the following might cause an "increase in the demand for X"? A fall in the price of X. b. a. A fall in consumers' incomes, if X is an inferior good. A fall in the price of a complement for X. d. c. A rise in consumers' incomes, if X is an inferior good. both (b) and (c) are correct. e. 2. All else constant, an increase in the price of Good X will cause An increase in the demand for Good X P Type here to search 2 60°F Mostly clear
Transcribed Image Text:(would revenue increase or decrease)? Why? c. If the government permanently increases the price of cigarettes, will the policy have a larger effect on smoking one year from now or five years from now? d. Studies also find that teenagers have a higher price elasticity of demand than do adults. Why might thi be true? 2. Suppose the income elasticity of demand for Good X is -0.3. What are the impacts on the equilibrium price and quantity of Good X if the incomes of the consumers of Good X fall? 3. In addition to the information in the question above, suppose you also know that the cross price elasticity between Good X and Good Y is +1.5. What are the impacts on the equilibrium price and quantity of Good X if the price of Good Y increases at the same time that the incomes of the consumers of Good X fall? Multiple Choice There will likely be some multiple choice questions (in addition to short answer and essay questions) on the exams. Here are some sample multiple choice questions from old exams. 1. Which of the following might cause an "increase in the demand for X"? A fall in the price of X. b. a. A fall in consumers' incomes, if X is an inferior good. A fall in the price of a complement for X. d. c. A rise in consumers' incomes, if X is an inferior good. both (b) and (c) are correct. e. 2. All else constant, an increase in the price of Good X will cause An increase in the demand for Good X P Type here to search 2 60°F Mostly clear
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