15)Which of the following statements about a good's cross elasticity of demand is correct? * a)It is positive for normal goods. b)It equals the percentage change in quantity demanded divided by the percentage change in the income of its purchasers. c)It is all of the above d)It is negative for normal goods. e)It equals the percentage change in the income of its purchasers divided by the percentage change in the quantity demanded

15)Which of the following statements about a good's cross elasticity of demand is correct? * a)It is positive for normal goods. b)It equals the percentage change in quantity demanded divided by the percentage change in the income of its purchasers. c)It is all of the above d)It is negative for normal goods. e)It equals the percentage change in the income of its purchasers divided by the percentage change in the quantity demanded

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 31CTQ: Economists define normal goods as having a positive income elasticity. We can divide normal goods...

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(Other Elasticity Measures) Complete each of the following sentences: a. The income elasticity of demand measures, for a given price, the __________ in quantity demanded divided by the __________ income from which it resulted. b. If a decrease in the price of one good causes a decrease in demand for another good, the two goods are __________. c. If the value of the cross-price elasticity of demand between two goods is approximately zero, they are considered __________.
Estimates presented in Exhibit 5 show that Android users have a higher price elasticity of demand for apps in the Google Play Store than do iPhone users in the Apple App Store. Why might Android users tend to be more sensitive to app prices than iPhone users? What categories or types of apps (for example, games/social media) do you think have the highest price elasticities?
Suppose a movie theater raises the price of popcorn 10 percent, but customers do not buy any less popcorn. What does this tell you about the price elasticity of demand? What will happen to total revenue as a result of the price increase?
Economists define normal goods as having a positive income elasticity. We can divide normal goods into two types: Those whose income elasticity is less than one and those whose income elasticity is greater than one. Think about products that would fall into each category. Can you come up with a name for each category?