Ans 280 1 number of substitutes the more substitutes

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Chapter 8 / Exercise 6
Calculus
Stewart Expert Verified
ANS: 280
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Chapter 8 / Exercise 6
Calculus
Stewart Expert Verified
1) Number of substitutes - The more substitutes there are for a product (and the closer the substitutes are) the higher the price elasticity of demand. 2) Necessities versus luxuries - The more that a good is considered to be a luxury rather than a necessity, the higher the price elasticity of demand. 3) Percentage of one's budget spent on the good - The greater the percentage of one's budget spent on the good, the greater the price elasticity of demand. 4) Time - The more time that passes since the price change, the greater the price elasticity of demand for the good. PTS: 1 DIF: Difficult NAT: Analytic LOC: Elasticity 2. Describe what cross elasticity of demand measures. Be specific in your response.
PTS: 1 DIF: Moderate NAT: Analytic LOC: Elasticity 3. How does price elasticity of demand vary along a straight-line downward-sloping demand curve? Why does this occur?
PTS: 1 DIF: Moderate NAT: Analytic LOC: Elasticity 4. What does price elasticity of supply measure? Explain the relationship that exists between price elasticity of supply and the length of time allowed to adjust to the price change.
PTS: 1 DIF: Moderate NAT: Analytic LOC: Elasticity 5. Explain the difference between price elasticity of demand and the slope of a demand curve.
There are two main differences between price elasticity of demand and the slope of a demand curve.
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