Homework: Chapter 3

5

10

points

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Suppose the own price elasticity of demand for good X is -5, its income elasticity is -1, its advertising elasticity is 4, and the cross-

price elasticity of demand between it and good Yis 3. Determine how much the consumption of this good will change if:

Instructions: Enter your responses as percentages. If you are entering a negative number, be sure to use a (-) sign.

a. The price of good X decreases by 6 percent.

percent

b. The price of good Yincreases by 7 percent.

percent

c. Advertising decreases by 2 percent.

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percent

d. Income increases by 3 percent.

percent

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