Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Question
Chapter 20, Problem 6E
To determine
(a)
To identify:
Whether bread and butter are complements or substitutes.
To determine
(b)
To identify:
Whether bread and potatoes are complements or substitutes.
To determine
(c)
To identify:
Whether socks and shoes are complements or substitutes.
To determine
(d)
To identify:
Whether tennis rackets and golf clubs are complements or substitutes.
To determine
(f)
To identify:
Whether bicycle and automobiles are complements or substitutes.
To determine
(g)
To identify:
Whether foreign investment and direct investment are complements or substitutes.
To determine
(g)
To identify:
Whether cars made in Japan and cars made in U.S. are complements or substitutes.
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Students have asked these similar questions
Question 5
a. Using the table below which outlines the price and quantity demanded of three
goods, calculate the following:
P1
2.50
Q1
30
Q2
65
P2
Lobster
1.45
Cereal
9.00
12.00
40
25
Orange Juice
i. The price elasticity of demand for lobster
ii. The cross-price elasticity of cereal with respect to orange juice
4.45
6.75
150
125
b. Transport operators in Belize received permission to increase their fares 15
percent, and they anticipated that revenues would increase by about 15
percent. When the 15 percent increase was enacted revenues increased by only
about 5 percent. What can you infer about the elasticity of demand for
transportation? What were operators assuming about the elasticity of demand?
Using the table below:i. Calculate the cross-price elasticity of broccoli. ii. Are fish and broccoli complementary or substitute goods? Explain.
Price of fish Quantity of fish Price of broccoli Quantity of broccoliPeriod 1 $7 8 lbs $4.50 10 lbsPeriod 2 $9 5 lbs $6.25 6 lbs
When the price of rice falls from $100 to $80, the quantity demanded of rice increases from 10 to 25, the quantity demanded of potatoes decreases from 20 to 15, and the quantity demanded of chicken increases from 18 to 35.
i. Calculate the cross elasticity of demand for potatoes with respect to rice.ii. Calculate the cross elasticity of demand for chicken with respect to rice. iii. Of what use are these two cross elasticities of demand to the owner of a business that sells potatoes and chicken?
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