If a higher price for good X causes a decrease in the demand for good Y, the cross elasticity value for the two goods would be A. negative. B. equal to zero. C. positive. D. possibly negative, positive, or zero, but there is not enough information to decide

If a higher price for good X causes a decrease in the demand for good Y, the cross elasticity value for the two goods would be A. negative. B. equal to zero. C. positive. D. possibly negative, positive, or zero, but there is not enough information to decide

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter19: Elasticity

Section: Chapter Questions

Problem 2WNG: As the price of good X rises from 10 to 12, the quantity demanded of good Y rises from 100 units to...

See similar textbooks

Similar questions

(Other Elasticity Measures) Complete each of the following sentences: a. The income elasticity of demand measures, for a given price, the __________ in quantity demanded divided by the __________ income from which it resulted. b. If a decrease in the price of one good causes a decrease in demand for another good, the two goods are __________. c. If the value of the cross-price elasticity of demand between two goods is approximately zero, they are considered __________.
As the price of good X rises from 10 to 12, the quantity demanded of good Y rises from 100 units to 114 units. Are X and Y substitutes or complements? What is the cross elasticity of demand?
Economists define normal goods as having a positive income elasticity. We can divide normal goods into two types: Those whose income elasticity is less than one and those whose income elasticity is greater than one. Think about products that would fall into each category. Can you come up with a name for each category?
Over time, technological advance increases consumers incomes and reduces the price of smartphones. Each of these forces increases the amount consumers spend on smartphones if the income elasticity of demand is greater tha____________ and if the price elasticity of demand is greater than_____________. a. zero, zero b. zero, one c. one. zero d. one, one
Suppose that your demand schedule for pizza is as follows: a. Use the midpoint method to calculate your price elasticity of demand as the price of pizza increases from 8 to 10 if (i) your income is 20,000 and (ii) your income is 24,000. b. Calculate your income elasticity of demand as your income increases from 20,000 to 24,000 if (i) the price is 12 and (ii) the price is 16.
Using the following equation for the demand for a good or service, calculate the price elasticity of demand (using the point form), cross-price elasticity with good x and income elasticity. Q=82P+0.10I+Px Q is quantity demanded, P is the product price. P1 is the price of a related good, and I is income. Assume that P= $10, I = 100, and Px = 20.
Income Effects depend on the income elasticity of demand for each good limit you buy. If one of the goods you buy has a negative income elasticity, that is, it is an inferior good, what must be true of the income elasticity of the other good you buy?
Suppose that your demand schedule for DVDs is as follows: Price Quantity Demanded (income = 10,000) Quantity Demanded (income = 12,000) 8 40 DVDs 50 DVDs 10 32 45 12 24 30 14 16 20 16 8 12 a. Use the midpoint method to calculate your price elasticity of demand as the price of DVDs increases from 8 to 10 if (i) your income is 10,000 and (ii) your income is 12,000. b. Calculate your income elasticity of demand as your income increases from 10,000 to 12,000 if (i) the price is 12 and (ii) the price is 16.
State whether the following statements are true or false a. If a product has price elasticity of demand greater than 1 then a rise in the price of the good will lead to a rise in total revenue received. b. A price elasticity of demand of 0.4 means that a 4% increase in price leads to a 10% reduction in the quantity of a good demanded. c. Goods A and B are complementary if a rise in the price of good A leads to a fall in the demand for good B
13. If a change of 15% in price of good X, results in a change in demand for good Y of 5%,then:(a) The cross-price elasticity of demand is 1/3 and the goods are substitutes(b) The cross-price elasticity of demand is 3 and the goods are substitutes(c) The cross-price elasticity of demand is 1/3 and the goods are complements(d) The cross-price elasticity of demand is 3 and the goods are complements(e) None of the above is true
The accompanying table lists the cross-price elasticities of demand for several goods, where the percent quantity change is measured for the first good of the pair, and the percent price change is measured for the second good. ( please see image) a. Explain the sign of each of the cross-price elasticities. What does it imply about the relationship between the two goods in question? b. Compare the absolute values of the cross-price elasticities and explain their magnitudes. For example, why is the cross-price elasticity of McDonald’s burgers and Burger King burgers less than the cross-price elasticity of butter and margarine? c. Use the information in the table to calculate how a 10% increase in the price of Pepsi affects the quantity of Coke demanded. d. Use the information in the table to calculate how a 5% decrease in the price of gasoline affects the quantity of SUVs demanded.
Compute the elasticity values. State the degree of elasticity and the nature of the goods.1. An increase in the price of Good Y from $5.00 to $6.00 causes the demand for Good X to decrease from 1000 units to 700 units.2. An increase in income from $3000 to $4000 causes the demand for chicken to increase from 6 to 7 kilos.3. The equation for a demand curve is P = 48 – 3Q. What is the elasticity in moving from a quantity of 5 to a quantity of 6?4. The equation for a supply curve is P = 3Q – 8. What is the elasticity in moving from a price of 4 to a price of 7?