Scenario 5-1 Suppose That When the Average College Student's Income Is $10,000

question 379

Multiple Choice

Scenario 5-1
Suppose that when the average college student's income is $10,000 per year, the annual quantity demanded of Patty's Pizza is 50 and the annual quantity demanded of Sue's Subs is 80. Suppose that when the price of Patty's Pizza increases from $8 to $10 per pie, the quantity demanded of Sue's Subs increases from 80 to 100. Suppose also that when the average student's income increases to $12,000 per year, the annual quantity demanded of Patty's Pizza increases from 50 to 60.
-Refer to Scenario 5-1. Using the midpoint method, the cross price elasticity of demand is

• A) about 0.22, and the two goods are substitutes.
• B) about -0.005, and the two goods are complements.
• C) 1, and the two goods are substitutes.
• D) 1, and the two goods are unitary elastid.

---

Definitions:

Single Purpose

Designed or intended to fulfill only one specific function or task, without deviation or multipurpose utility.

Two-Party System

A political system dominated by two major parties, often limiting the presence or success of smaller or third parties.

Legislative Chamber

A formal assembly or room where a legislature meets to discuss and make laws.

Majority

The greater part or number; the number of votes, seats, or individuals in a group that is more than half of the total count.