1 / 4

Understanding Complementary Goods & Price Elasticity

Learn about complementarity, cross-price elasticity, and income elasticity with practical examples in economics.

vfortin
Download Presentation

Understanding Complementary Goods & Price Elasticity

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. AGEC 105 - EQ #5 October 3, 2012 P Name_______________ P UIN____________ • Which of the following combination of goods most closely fits the definition of a complement? • Tropicana and Minute Maid orange juice • Pepsi and Coca-Cola • Mrs. Baird’s bread and Colgate toothpaste • Pancakes and maple syrup

  2. 2. Which one of the following combinations of goods is in line with a cross-price elasticity of zero? (a) Mrs. Baird’s bread and Colgate toothpaste (b) Pepsi and Coca-Cola (c) Pancakes and maple syrup (d) Tropicana and Minute Maid orange juice

  3. 3. Which one of the following combinations of goods is in line with a positive cross-price elasticity? (a) Mrs. Baird’s bread and Colgate toothpaste (b) Pepsi and Coca-Cola (c) Pancakes and maple syrup (d) None of the above

  4. EQ #5 – AGEC 105 – OCTOBER 3, 2012 (1pt ) 4. (a) According to this diagram, calculate the income elasticity of demand for pizza between points A and B. (0.5 pts) (b) What kind of good is pizza? (1 pt) 5. Assume that you are an economic analyst for Pepsi. You suspect that if Coca-Cola raises the price for its products from $3.00 to $3.30, the quantity demanded of Pepsi products will rise by 2%, all other factors invariant. What is the cross-price elasticity between Pepsi and Coca-Cola products? I B $35,000 A $25,000 QPizza 14 16

More Related