1. The price elasticity of demand for beer is estimated to be about -0.3 (remember sometimes we forget about the sign for the price elasticity of demand because it's always negative). Interpret the price elasticity of demand for beer by answering the following. If the price of beer falls by 1%, by how much with the quantity demanded of beer change?
2. A research study found that the cross-price elasticity of demand between beer and spirits (vodka, whisky, etc.) is -0.50. Does this elasticity estimate imply that beer and spirits are substitute goods or complementary goods? Briefly explain your answer.