-In the Above Table, the Cross Price Elasticity of Demand

question 284

Multiple Choice

-In the above table, the cross price elasticity of demand for good Z with good Y when P_Y rises from $15 to $18 is

• A) -2.20.
• B) +2.20.
• C) +1.10.
• D) -1.10.

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Definitions:

Disposable Income

The sum households have for expenditures and savings after taxes on income are deducted.

Dissaving

The process where spending exceeds income, leading to a depletion of savings or accumulation of debt.

APC

The Average Propensity to Consume, which measures the fraction of income that households spend on goods and services rather than saving.

Disposable Income

The spendable income of households after income tax deductions tailored for saving and spending.