ames consumes two types of goods: fruit and clothing. Fruits cost him $ 2 per unit, clothing costs $ 25 per unit, ail ncome is $ 1,000. He always spends 40% of his income on fruit, regardless of the price of fruit and clothing, as well as hi ncome. a. What is the cross-price elasticity of its demand for fruit relative to the price of clothing? b.What is the elasticity-income of its fruit demand?

ames consumes two types of goods: fruit and clothing. Fruits cost him $ 2 per unit, clothing costs $ 25 per unit, ail ncome is $ 1,000. He always spends 40% of his income on fruit, regardless of the price of fruit and clothing, as well as hi ncome. a. What is the cross-price elasticity of its demand for fruit relative to the price of clothing? b.What is the elasticity-income of its fruit demand?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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