State the cross price elasticity (of demand). Suppose the price of a good (X) is RM5, now the price of that good (X) increases by 5%. As a consequence, the demand of another good (Y) decreases by 10%. What is the cross-price elasticity for the good Y. Is the good (Y) is a substitute good or a complementary good to the first one?

The quantity demanded for product A increases 8% when the price of product B increases 16% and the other variables remain the same. Calculate the cross elasticity of demand. Products A and B, are they complementary or substitutes? Why? By drawing a graph, show the change in the demand curve for product A as a result of the change in the price of product B.

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.

Suppose that the price elasticity of demand for a packet of cigar is -0.85 and the price elasticity of supply is 1.5 at market equilibrium. As a result of an increase on sales tax, the new equilibrium price rises by 15%. (a) What is the percentage change in quantity demanded of cigar? Show your calculation.

The cross-price elasticity between the good sold in this market (call it X) and another good (Y) is εXY = –0.80. The cross-price elasticity between the good X and good Z, on the other hand, is εXZ = 1.50. Are X and Y substitutes, complements, or unrelated? How about X and Z? Explain.

Suppose the demand curve for a good is P = 10 - 2Q. Drawing the demand line and by calculating the point elasticity of demand, explain for which region of prices the demand will be a) Elastic b) Unit elastic c) Inelastic

If the cross-price elasticity of demand for good X with respect to good Y equals 0, how is that value interpreted? These goods are complements, and the quantity demanded of good X increases if the price of good Y decreases. These goods are unrelated, and a change in the price of good Y has no effect on the quantity of good X demanded. These goods are normal goods, and a change in buyers income increases the quantity demanded of good X. These goods are substitutes, and the quantity demanded of good X decreases if the price of good Y decreases.

When a negative income elasticity for a good results in income increases leading to a decline in demand for that good we can say that the good can be termed either: (a)  Normal Good (b)  Inferior Good (c)  Compliment d)  Substitute    Which is it?

The demand for good X has been estimated by Q xd = 12 − 3Px + 4Py. Suppose that the price of good X (Px) is $2 per unit and the price of good Y (Py) is $1 per unit. (a) Calculate the own price elasticity. Please show your calculations. (b) Calculate the cross price elasticity of demand. Please show your calculations.

Suppose that your demand schedule for DVDs is as follows: Price Quantity Demanded (income - $10,000) $8 40 DVDs 10 32 12 24 14 16 16 B Quantity Demanded I (income-$12,000) 50 DVDs 45 30 20 12 a. Use the midpoint method to calculate your price elasticity of demand as the price of DVDs increases from $12 to $16 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 $10 and (ii) the price is $14. c. Is the DVDs normal good or inferior good?