Other Economics Answers

If the cross elasticity of demand between two goods is negative,

•  A. one of the goods must be a necessity.
•  B. the two goods are complements.
•  C. one of the goods must be inferior.
•  D. the two goods are substitutes.

The income elasticity of demand for luxury goods is greater than one. This means that the

•  A. percentage change in quantity demanded is smaller than the percentage change in income.
•  B. percentage change in quantity demanded is greater than the percentage change in income.
•  C. percentage change in quantity demanded is equal to the percentage change in income.
•  D. percentage change in price is greater than the percentage change quantity demanded.

If Shelly’s income increases by 10% and at the same time there is a 2% decrease in her quantity demanded of potatoes, the income elasticity is

A. 2

B. 0,5.

C. -5

D. -0,2.

• The income elasticity of demand for a good measures the responsiveness of __________ to a change in ___________. A. quantity demanded; price of a related good
•  B. quantity demanded; price of a good
•  C. quantity demanded; income
•  D. demand; price of a good

A 10 percent increase in the price of spinach results in a 20 percent decrease in the quantity of spinach demanded. What is the price elasticity of demand for spinach?

A. 2

B. 10

C. 20

D. 0,5

Price per kg Quantity demanded

R30 1000

R32 850

Using the midpoint method calculate the price elasticity of demand (using 2 decimal places) for the R30 to R32 price range. The price elasticity of demand for tomatoes is

Price Quantity demanded

R1 100

R2 80

R3 60

R4 40

R5 20

What is the price elasticity of demand when the price changes from R4 per ice cream cone to R5 per ice cream cone? (Use the formula for arc elasticity.)