Question

If goods X and Y are substitute goods, then the cross-price
elasticity of the price of good Y on the demand

for good X is:

Select one:

a. positive

b. zero

c. undefined

d. negative

Answer #1

If good X and Y are substitute to each other, cross price elasticity between them must be positive because increase in price of Y (positive change) leads to increase in demand of X (positive change) and vice versa because consumers look for cheaper alternative available (good X) when price of a good rises (good Y).

Cross price elasticity is calculated as: %change in quantity demanded of X / %change in price of Y

Positive change / Positive change leads to positive cross price elasticity of demand.

**Option A is correct.**

Cross-price elasticity of demand is
a. negative for complementary goods.
b. negative for substitute goods.
c. positive for general goods.
d. unitary for secondary goods.

Suppose the
cross-price elasticity of demand between goods X and
Y is -5. How much would the price of good Y have
to change in order to change the consumption of good X by
50 percent?
Instruction: If you are entering a negative
number, be sure to use a negative sign (-).
_________percent

The cross (also called cross-price) elasticity of demand is
Select one:
a. positive for inferior goods
b. positive for complements
c. positive for substitutes
d. positive for normal goods
e. never positive

40) The cross elasticity of demand for butter and margarine is
likely to be A) positive because they are substitutes.
B) positive because they are complements.
C) negative because they are substitutes.
D) negative because they are complements.
E) positive because they are normal goods.
41) If an increase in the price of green ketchup increases the
demand for red ketchup, then
A) red and green ketchup are substitutes.
B) red and green ketchup are normal goods.
C) the cross...

The cross-price elasticity of demand between goods X and Y
measures the responsiveness of the quantity of X demanded to
changes in the price of Y.
is the percentage change in the price of Y divided by the
percentage change in the quantity of X demanded.
is greater than zero if X and Y are substitutes.
both a and c
all of the above

The price elasticity of demand uses the absolute value because
it is sometimes negative or always negative
.The income and cross elasticities of demand do not use the
absolute value because they can be negative only, positive
only or positive or negative
The income elasticity of demand is positive for a normal
or inferior good and negative for an inferior or
normal good.
The cross-price elasticity of demand is positive for
complementary or substitute goods and negative for
complementary or...

Suppose the cross-price elasticity of demand between goods X and
Y is 5. How much would the price of good Y have to change in order
to change the consumption of good X by 20 percent? percent

If the cross-price elasticity of demand between Good A and Good
B is 3, the price of Good B increases, and the price elasticity of
demand for Good B is inelastic, we can expect to see a ________
change in the quantity demanded for Good A.
a.positive, zero
b.positive, small
c.positive, large
d.negative, one-for-one negative,
e.infinite

Suppose the own price elasticity of demand for good X is -3, its
income elasticity is -2, its advertising elasticity is 4, and the
cross-price elasticity of demand between it and good Y is -2.
Determine how much the consumption of this good will change if:
Instructions:
Enter your responses as percentages. Include a minus (-)
sign for all negative answers.
a. The price of good X decreases by 7 percent.
b. The price of good Y increases by 10...

1. For each of the following say either "positive," "negative,"
or "either."
a. The (price) elasticity of demand.
b. The (price) elasticity of supply.
c. The cross-price elasticity for substitutues.
d. The cross-price elasticity for compliments.
e. The income elasticity for a normal good.
f. The income elasticity for an inferior good.
2. When the price of good X goes from $20 to $25, the quantity
goes from 100 to 65.
a. What is the elasticity of demand?
b. Is...

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