Question: Suppose at a party for economics majors you win a
Suppose, at a party for economics majors, you win a choice among three mystery boxes. You don't know what each contains, but you know that each box has a pair of gifts. You know that one box has a CD and a pair of sunglasses, another has tickets to a Flaming Lips concert and a gift certificate to a close-by restaurant for dinner before the concert, and the other has two very similar textbooks on economics. The only clue given is the cross elasticities among the gifts in each box: for the red box, cross elasticity is +1.5, for the blue box, -1.5, and for the white box, 0. If you wanted the dinner and concert pair, which box would you pick?
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