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Question 1

Suppose that when income increases from $2700 to $3300 quantity demanded changes from 190 to 210.

Using the mid-point elasticity approach, calculate income elasticity.

 

Suppose that the income increases from $2850 to $3450. As a result, quantity demanded changes from 180 to 230.

Based on this information you can tell that this products is:

 

Suppose that the price of one product increases from $13 to $50. As a result, quantity demanded for another product changes from 260 to 180.

Based on this information, calculate cross-price elasticity:

 

Suppose that the price of one product increases from $18 to $42. As a result, quantity demanded for another product changes from 150 to 200.

Based on this information you can tell that these two products are:

 


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