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dishtinguish between substitutes goods and complementary goods.
dishtinguish between superior or normal goods,inferior goods.
The difference between substitute and complimentary is:A substitute is something used instead of a particular good or service, eg. for dinner , if you decide to eat beef instead of...
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Explain the concept of income elasticity of demand. How is it used to identify normal goods, luxuries, necessities, and inferior goods? Be as specific and logical as possible.
Income elasticity of demand measures the responsiveness of demand to a change in income. Depending on the value of the income elasticity coefficient products are divided into normal goods, luxuries,...
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Why are all giffen goods inferior goods but not all inferior goods are giffen
Reason Why all Giffen Goods are Inferior whereas not all Inferior Goods are Giffen. Inferior goods are the goods whose demand falls as income of the consumer increases. On the other...
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Suppose u(x1, x2) = x1x2. Are x1 and x2 gross complements or substitutes? Are they net
complements or substitutes?
x1 and x2 are gross complement because. Good X1 is a gross complement for good x2 if an increase in the price of X1causes a decrease in demand for x2....
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Why is the slope of the demand for inferior goods steeper than for a normal good? What happens to a normal and an inferior good when the price goes up? Show this graphically and explain.
In case of inferior goods, quantity demanded varies inversely with price when negative income effect is weaker than the substitution effect. In other words, even in case of inferior goods...
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What type of goods are gas and electricity if the cross elasticity of demand between these two goods are positive
Gas and electricity are substitutes because as the price of one of the items rises, the demand for the other one rises.
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If the cross elasticity of demand between X and Y is negative, then are X and Y substitutes or complements? Explain your answer.
The two goods are Complements.Two goods that complement each other if they have a negative cross elasticity of demand.This means as the price of good Y rises, the demand for...
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Distinguish between substitutes and complements using cross price elasticity coefficients to motivate your answer.
Substitute goods are goods whose cross price elasticity is positive. This means that as the price of one good rises, the demand for the other good increases.On the other hand,...
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Distinguish between substitutes and complements using cross elasticity coefficients
Substitutes are goods whose cross price elasticity is positive. This implies that as the price of one good rises, the demand for the other good raises.On the other hand complement...
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1.5 If the cross elasticity of demand between tablets and smart phones is 2.0 this implies that these goods are ; (a) Luxuries, (b) Complements, (c) Necessities, (d) Substitutes. Which one is True?
Tablets and smart phones are Substitutes goods.
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