Siteadmin, Bureaucrats, Check users, nsAm_Govt_101RO, nsAm_Govt_101RW, nsAm_Govt_101_ta, nsJudgesRO, nsJudgesRW, nsJudges_talkRO, nsJudges_talkRW, nsTeam2RO, nsTeam2RW, nsTeam2_talkRO, nsTeam2_talkRW, oversight, Administrators
125,789
edits
Changes
Jump to navigation
Jump to search
Line 117:
Line 117: + + + + + + + + + +
Economics Homework Final Answers - Student Three (view source)
Revision as of 22:30, February 19, 2010
, 22:30, February 19, 2010explanation for #46
Ok, I think I understand that one, now. Thank you! --[[User:TrishaM|TrishaM]] 16:33, 19 February 2010 (EST)
Ok, I think I understand that one, now. Thank you! --[[User:TrishaM|TrishaM]] 16:33, 19 February 2010 (EST)
:Great, now here is the explanation for 46:
::The cross-elasticity of demand for good X with respect to good Y is the percent change in demand for good X divided by the percent change in price for good Y. It is how much the demand changes for good X due to a change in price for good Y (because they may be complements or substitutes, for example). It can have one value for the "short run" and another value for "long run." Given what those values are, and given the price change in good Y (50%), you can work backwards to find the percent change in demand for good X:
::: (percent change in good X) divided by (50%) = -0.2 in the short run.
::: Thus the percent change in good X = -0.2 times 50% = -0.1 = - 10% = decrease by 10%
::Now see if you can calculate it for the long run to obtain the same answer as (e). This is asked on the CLEP exam.--[[User:Aschlafly|Andy Schlafly]] 17:30, 19 February 2010 (EST)