Suppose the cross elasticity of demand for two goods, X and Y, is positive. If the price of Y falls, then quantity demanded will.. O a. Rise for both goods. O b. Rise for X and fall for Y. O c. Remain the same for both goods. O d. Fall for X and rise for Y. O e. Fall for both goods.

Suppose the cross elasticity of demand for two goods, X and Y, is positive. If the price of Y falls, then quantity demanded will.. O a. Rise for both goods. O b. Rise for X and fall for Y. O c. Remain the same for both goods. O d. Fall for X and rise for Y. O e. Fall for both goods.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Suppose the price elasticity of demand for bread is 0.20. If the price of bread falls by 10 percent,…

A: The elasticity of demand indicates the responsiveness to the change in the price and measures the…

Q: a a new digital album is given byn=-1.58, which of the following is true? a) To increase revenue,…

A: Elasticity of demand depicts how much consumer responds with the change in the price level.

Q: There is a negative relationship between the price of fuel and quantity demanded for cars, as these…

A: Answer 1 - (c) Complementary goods Answer 2 - (a) A rise in the price of the commodity

Q: Suppose the price of good A increases by 50%, causing quantity demanded for good B to increase by…

A: In this question we have to find out the cross elasticity of demand with the help of the above…

Q: If a product's income elasticity is -0.9, then we can conclude that OA. the product is a luxury…

A: Income elasticity is a measure of how sensitive the demand for a product or service is to changes in…

Q: If the Cross Elasticity of demand between two goods is Negative, then the two goods are goods.…

A: The elasticity of demand (E) depicts the responsiveness of the quantity demanded (Qd) of a good…

Q: Which one of the following statement is true? O a. Demand for a good tends to change when you…

A: The law of demand states that there is an inverse relationship between the price and quantity…

Q: When the percentage change in quantity demanded is greater than the percentage change in price, then…

A: The responsiveness of demand or supply to the changes in incomes or prices is being measured by the…

Q: Product A is an inferior good with no close substitutes. It is also a complement to product B. Which…

A: Complement good: Complement goods are those goods that are said to be used together. For the…

Q: Consider the demand curve illustrated in the figure to the right. Is demand elastic or inelastic? O…

A: The price elasticity is calculated as the percentage change in quantity demanded divided by the…

Q: A positive cross-elasticity of demand for two products indicates that they are: Multiple Choice O O…

A: Two goods are said to be complementary when they are used together. Two goods are said to be…

Q: Table 4 Income $30,000 $40,000 Quantity of Good X Purchased 2 6 Quantity of Good Y Purchased 20 10…

A: Income elasticity determines the % change in the demanded quantity with respect to a unitary change…

Q: 66. Elasticity measures Select one: O a. The slope of a demand curve O b. The inverse of the slope…

A: Elasticity plays an important role in economics. The elasticity of demand is important for firms to…

Q: Which one of the following would not shift the demand curve for US domestic airline travel in…

A: Demand depends on price, income, taste, preferences, and other factors. When price changes the…

Q: QUESTION 6 Aman who started a business a few years ago increased the price of the product he sells…

A: Hi Student, Thanks for posting the question. As per the guideline, we are providing answer for the…

Q: When calculating the cross-price elasticity of demand between any two goods, O a. the answer will…

A: The point here is to understand and distinguish the correct statement with respect to the idea of…

Q: Which of the following statements regarding price elasticity is incorrect? *FE OA. When demand is…

A: When demand is price elastic, higher prices reduce demand-This statement is correct.In a price…

Q: Good X is a normal good. In the market for Good X, what do you think will happen if consumer incomes…

A: Higher consumer income increases demand for a normal good, increasing its price and quantity. A…

Q: The demand for a given good will decrease when the price of its substitute and the demand for a…

A: Definition of the substitute goods: Two goods x and y are said to be substitute goods if the demand…

Q: QUESTION 19 Consider a standard model of demand with price on the Y akis and quantity on the X axis…

A: Demand curve shows the graphical representation of the relationship between the price and quantity…

Q: O C. negative; negative O D. positive; negative If the income elasticity of SUVS is greater than 1,…

A: *answer:

Q: 7. In city A there is a lower elasticity of supply of houses than in city B and currently house…

A: The elasticity of supply:The price elasticity of supply is calculated by dividing the percentage…

Q: In 2002, Rachel was a college student and she could barely afford to buy expensive clothes. However,…

A: In a market, a good can be normal, inferior,. luxurious or necessities base don it's requirement by…

Q: Cross elasticity of demand for complimentary goods is O a. Positive O b. Zero O c. None of these…

A: Cross demand- It is one of the significant forms of demand in which a commodity's demand depends not…

Q: What is the price elasticity of demand? O A. The extent to which a change in price is affected by…

A: The change in quantity required or provided as a result of differences in the demand or supply…

Q: . How did the pandemic affect the lives of working students? 2. What are the experiences of working…

A: Pandemic basically refers to the situation when a diseases occurs in an country or multiple…

Q: Suppose the demand curve for a product is: Q = 90 – 6P + 4Ps, where P is the price of the product…

A: The cross-price elasticity of demand measures the relationship between the quantity demanded of a…

Q: Suppose the price of Cheerios rises by 25%, and the quantity of milk sold decreases by 50%. We know…

A: Cross price elasticity of demand measures the responsiveness of quantity demanded of good 1 with…

Q: If the cross-price elasticity of demand is -3, then OA. the goods are substitutes OB. one good is…

A: Cross price elasticity of demand tells the relationship between the two goods, i.e., whether they…

Q: QUESTION 4 If people are less responsive to a price change then the O a. demand for that good is…

A: 4) b. The demand for the good is said to be inelastic.

Q: uppose Amy's income increased from $8,000 to $12,000. As a result, her consumption of apples…

A: Income elasticity of demand measures the responsiveness in quantity demanded of a commodity to a…

Q: Income falls from $80,000 to $76,000 and quantity demanded changes from 320 to 460. Calculate the…

A: To determine the income elasticity of demand and classify the good, we can use the income elasticity…

Q: If the price elasticity of demand for good X is 0.8

A: Elasticity of demand is a technique with the help of which change in quantity demanded is measured…

Q: The quantity demanded of salt decreases when the price of pepper increases. This is an example of…

A: Consider the following definitions Own price elaticity: when the quantity demanded of salt change…

Q: If the cross-price elasticity between the price of good A and the demand for good B is zero, this…

A: Cross price elasticity measures the responsiveness of quantity demanded of good1 with respect to…

Q: Suppose the Lethbridge Computer Company decides to increase the quantity of computers it sells by 6…

A: Price elasticity of demand is the ratio of the percentage change in quantity demanded of a product…

Concept explainers

Elasticity of Demand and Supply

The elasticity of demand and supply are two important concepts of microeconomics. The elasticity of demand measures the responsiveness of consumers’ demands to the price change, changes in income of consumers, and changes in the price of the related goods. Similarly, the elasticity of supply refers to the proportionate change in the quantity supplied due to the proportionate change in the price. In other words, it can be said that elasticity of supply measures how the quantity of supply changes when the price changes of that particular product.

Question

Suppose the cross elasticity of demand for two goods, X and Y, is positive. If the price of Y falls, then quantity
demanded will..
O a. Rise for both goods.
O b. Rise for X and fall for Y.
O c. Remain the same for both goods.
O d. Fall for X and rise for Y.
O e. Fall for both goods.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

6
Suppose that video game discs are a normal good.. If the income of video game players increases, you predict that in the market for video games, O both equilibrium price and quantity will fal. O equilibrium price will increase, and quantity will decrease. o both equilibrium price and quantity will increase. O equilibrium price will fall, but quantity will increase.
If the price elasticity of demand has a value of -1.3, this means: Select one: O a. A 1 percent increase in the price of the good causes quantity demanded to decrease by 1.3 percent. O b. A 1 percent increase in the price of the good causes quantity demanded to increase by 1.3 percent. O c. A 1.3 percent increase in the price of the good causes quantity demanded to decrease by 1 percent. O d. A$1 increase in price causes quantity demanded to fall by 1.3 units.
If the cross elasticity of demand is -2: O a. The products are substitutes O b. The products are complements O c. The good is normal O d. The good is inferior
If goods A and B are substitutes, an increase in the price of A will result in Select one: a. no difference in the quantity sold of either good O b. None of the answers are correct O c. increases the demand for O d. reduces the demand for B
M7
Assume that demand for a service depends upon price and income, where the price elasticity of demand is Ep o=-0.6 and the income elasticity of demand is E1, q=1.2. If price falls by 49 and income rises by 296, the quantity demanded of the service will O A. increase by 69 O B. increase by 4.896 O C. decrease by 9.6% O D. decrease by 2.49
O X₁ V -IC, IC₂ IC, X₂ B X, X, B, B₂ (a) Are goods X and Y substitutes or complements? Explain. B₂ X (b) Let Y refer to all other goods. Is the demand for good X elastic or inelastic? Explain.
QUESTION 3 X and Y are complementary goods. When the price of X is £5, consumers buy 1000 units of X, but when the price of X goes up to £7 they buy 500 units Which of the following statements describes this situation? O a. The own price elasticity is -1.25 and the cross-price elasticity is negative O b. The own price elasticity is 1.25 and the cross-price elasticity is negative O c. The own price elasticity of demand for X is -0.8 and the cross-price elasticity is negative Od. The own price elasticity of demand for X is 0.8 and the cross-price elasticity is positive
The cross-price elasticity of demand for Goods A and B is equal to one. O A. A and B have the same unit price. O B. A and B are complement goods. O C. A and B are perfect complements. O D. A and B are substitute goods.
When income rises by 10%, the demand for Good A falls by 3%. From the above, we know Good A is O a complement a normal good O an inferior good O a substitute
Explains it correctly