Question
22. (ch2) Consider the following questions on elasticity. a. If a 3% increase in income leads to a 1% increase in the quantity purchased, what
22.
(ch2) Consider the following questions on elasticity.
a. If a 3% increase in income leads to a 1% increase in the quantity purchased, what is the income elasticity of demand? Is the good an inferior good?
b. The price of good Y decreases by 15% and the quantity sold of good X increases by 4%. What is the cross-price elasticity of demand for good X
with respect to good Y? How are good X and good Y related?
c. The demand equation is Qd= 15 - P. What is the price elasticity of demand at P = $6?
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Introduction to Econometrics
Authors: James H. Stock, Mark W. Watson
3rd edition
133595420, 978-0138009007, 138009007, 978-0133486872, 133486877, 978-0133595420
