CONNECT F/MICROECONOMICS
21st Edition
ISBN: 2810022151240
Author: McConnell
Publisher: MCG
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Question
Chapter 3.6, Problem 1QQ
To determine
Change in the demand due to changes in price .
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For a particular good, a 2 percent increase in price causes a 12 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
A. the good is a luxury
B. the market for the good is broadly defined
C. the relevant time horizon is short
D. there are no good substitutes for this good
B) When the price of Good A is $27, the quantity demanded of Good B is 1,200 units. When the price of Good A falls to $23 the quantity demanded of Good B falls to 800 units.
i. Calculate the cross elasticity of demand
ii. Are the goods substitutes or complements? Explain your choice.
iii. Explain how cross elasticity of demand is used.
vi. Explain how income elasticity of demand is used.
Price (P)
S1
P2
P1
Q:
Quantity (Q)
In the diagram above, which of the following events would explain the change shown?
Select one:
a. The price of a complementary good has increased, and this is the market for its related good.
b. There has been an improvement in the technology used to produce the good in this market.
c. Consumer incomes have increased and this is the market for a normal good.
d. There has an increase in the price of an important input used in the production of this good.
Chapter 3 Solutions
CONNECT F/MICROECONOMICS
Ch. 3.6 - Prob. 1QQCh. 3.6 - Prob. 2QQCh. 3.6 - Prob. 3QQCh. 3.6 - Prob. 4QQCh. 3.A - Prob. 1ADQCh. 3.A - Prob. 2ADQCh. 3.A - Prob. 3ADQCh. 3.A - Prob. 4ADQCh. 3.A - Prob. 5ADQCh. 3.A - Prob. 6ADQ
Ch. 3.A - Prob. 7ADQCh. 3.A - Prob. 1ARQCh. 3.A - Prob. 2ARQCh. 3.A - Prob. 3ARQCh. 3.A - Prob. 4ARQCh. 3.A - Prob. 5ARQCh. 3.A - Prob. 6ARQCh. 3.A - Prob. 1APCh. 3.A - Prob. 2APCh. 3.A - Prob. 3APCh. 3 - Prob. 1DQCh. 3 - Prob. 2DQCh. 3 - Prob. 3DQCh. 3 - Prob. 4DQCh. 3 - Prob. 5DQCh. 3 - Prob. 6DQCh. 3 - Prob. 7DQCh. 3 - Prob. 8DQCh. 3 - Prob. 1RQCh. 3 - Prob. 2RQCh. 3 - Prob. 3RQCh. 3 - Prob. 4RQCh. 3 - Prob. 5RQCh. 3 - Prob. 6RQCh. 3 - Prob. 7RQCh. 3 - Prob. 8RQCh. 3 - Prob. 9RQCh. 3 - Prob. 1PCh. 3 - Prob. 2PCh. 3 - Prob. 3PCh. 3 - Prob. 4PCh. 3 - Prob. 5PCh. 3 - Prob. 6PCh. 3 - Prob. 7P
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