Econ 211 practice probs 3 answers

Econ 211 practice probs 3 answers - Econ 211 Practice...

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Econ 211 Practice problems #3 (Elasticities) Patrick McLaughlin Practice Problems: These problems are to assist you in learning the material covered so far. They will not be collected. The answers are at the end, but I advise trying to do the problems without looking at the answers first. 1. If the income elasticity of demand for kumquats is 0 (yes, “zero”), a rise in the incomes of kumquat consumers will lead to a. a rise in the equilibrium price and quantity of kumquats b. a fall in the equilibrium price and quantity of kumquats c. a rise in the equilibrium price of kumquats, but a fall in the equilibrium quantity d. a fall in the equilibrium price of kumquats, but a rise in the equilibrium quantity e. no change in the equilibrium price or quantity of kumquats 2. If the cross price elasticity of demand between widgets and kumquats is -2.0, one can conclude that a. widgets and kumquats are substitutes and a rise in the price of one will cause an increase in the demand for the other
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This homework help was uploaded on 04/09/2008 for the course ECON 211 taught by Professor Johnson during the Spring '07 term at Clemson.

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Econ 211 practice probs 3 answers - Econ 211 Practice...

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