Calculate cross-price elasticity-price elasticity of good

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Reference no: EM131095895

The following graph will represent U.S. dollars on the y-axis and lbs. on the x-axis.

Good X

Good Y

1) Refer to the figure above. Calculate the price elasticity of Good X when prices for consumers decrease by $3.00 in the Good X market leading to a 3 lb. decrease in Good Y.

A) EpD = 0.73

B) EpS = 1.38

C) EpD = 1.38

D) EpS = 0.73

2) From number 31, the Good X market is experiencing a market failure. What is happening in Good X?

A) There is a shortage

B) There is a surplus

C) Consumers consume more

D) Producers produce less

3) From number 32, calculate the price elasticity of Good Y.

A) EpD = 0.72

B) EpS = 1.39

C) EpD = 1.39

D) EpS = 0.72

4) From number 33, calculate the cross-price elasticity.

A) EpXY = 0.72

B) EpXY = 1.20

C) EpXY = 1.39

D) EpXY = 0.84

5) From number 34, what is the relationship between Good X and Y?

A) Compliments

B) Normal

C) Substitutes

D) Inferior

Reference no: EM131095895

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