Question
a. Cross price elasticity = 0.75 b. The total amount Jill had= $9000 Explanation: a) Cross price elasticity = (%change in quantity of Good B)/(%change
a. Cross price elasticity = 0.75
b. The total amount Jill had= $9000
Explanation:
a) Cross price elasticity = (%change in quantity of Good B)/(%change in price of good A)
%change in quantity of Good B = 30%
%change in price of good A = (10-6)/10 * 100%
=40%
Cross price elasticity = 30/40 = 0.75
b) The amount Spend of $5000 is before the period and therefore not subject to 10% interest.
The amount subject to 10% interest is the $4400.
If the amount earned a 10% interest, then it is equivalent to 110%.
We therefore compute 100% which is the initial amount.
Initial amount = 100/110*$4400 = $4000
The total amount Jill had is $5000+$4000 = $9000
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