Question

A.) Suppose the price elasticity of demand for bread is 2.00. If the price of bread falls by 10%, the quantity demanded will increase by:

B.) Suppose that a 10% increase income causes a 20% increase in demand for good X. The coefficient of the income elasticity of demand is:

C.) The price of a weekly magazine decreases from $1.90 to $1.50. The quantity demanded increases from 100,000 to 200,000 copies. The price elasticity of demand in this range is:

D.) The income elasticity of demand for a good is 0.5. If demand decreased 5% as a result of a decrease in income, how much must income have declined?

E.) Demand for X increases from 100 to 125 when the price of Y decreases from $6 to $5. The cross-price elasticity of demand is:

Answer 1

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