The price of a bus ride rises by 10 percent. The price elasticity of demand for bus rides is 0.3 and the price elasticity of demand for train rides is 0.5. The cross elasticity of demand for train rides with respect to the price of a bus ride is 0.6.

a. Calculate the percentage change in the quantity demanded of bus rides and train rides. Also write out if it is an increase or decrease.

Bus rides:

............%..................(increase or decrease?)

Train rides:

...........% ..................(increase or decrease?)

b. Given the rise in the price of a bus ride, what is the percentage change in the price of a train ride that will leave the quantity demanded of train rides unchanged? Alsowrite out if it is an increase or decrease.

...............% ...................(increase or decrease?)