You are hired by a firm to look at several of its products. The firm is concerned that recession will come soon, and therefore that American average incomes will fall. It therefore asks you to consider several of its products and tell them which are likely to experience an increase in demand when income decreases. In other words, you'll be looking for goods with O positive income elasticity negative income elasticity O positive cross-price elasticity negative cross-price elasticity
You are hired by a firm to look at several of its products. The firm is concerned that recession will come soon, and therefore that American average incomes will fall. It therefore asks you to consider several of its products and tell them which are likely to experience an increase in demand when income decreases. In other words, you'll be looking for goods with O positive income elasticity negative income elasticity O positive cross-price elasticity negative cross-price elasticity
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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
Transcribed Image Text:You are hired by a firm to look at several of its products. The firm is concerned that recession
will come soon, and therefore that American average incomes will fall. It therefore asks you to
consider several of its products and tell them which are likely to experience an increase in
demand when income decreases.
In other words, you'll be looking for goods with
O positive income elasticity
negative income elasticity
O positive cross-price elasticity
negative cross-price elasticity
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