Use the Table Below to Answer the Following Questions

question 120

Multiple Choice

Use the table below to answer the following questions.
Windsurfing equipment rents for $10 per hour and snorkeling equipment rents for $5 per hour.
Table 8.2.1

-Consider Devon's total utility from snorkeling and windsurfing in Table 8.2.1. Suppose Devon's total income is $35. If the price of windsurfing rises to $20 per hour, what is Devon's cross elasticity of demand of snorkeling with respect to the price of windsurfing?

• A)1.0
• B)0.67
• C)1.5
• D)10
• E)1.33

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Definitions:

Income Effect

The change in an individual's or economy's income and how that change will affect the quantity of goods and services demanded.

Leisure

Leisure refers to the time available to an individual when not engaged in work or essential activities, often used for rest, recreation, or personal interests.

Wage

The payment to labor for its contribution to the production process, typically calculated on an hourly, daily, or piecework basis.

Marginal Expenditure

Additional cost of buying one more unit of a good.