Suppose that the typical economics student is interested in consuming (and spends all her money on) only two commodities: economics study guides and horror movie passes. An unlimited supply of horror movie passes is available at a price of $ 5 per pass while an equally unlimited supply of study guides covering endlessly different (and interesting) nuances in economics can be purchased for $ 30 each. The student currently purchases 20 horror movie passes and 10 study guides per semester. If the typical student’s price and income elasticities of demand for horror movie passes are both unity, what is the student’s cross- price elasticity of demand for study guides with respect to changes in the price of horror movie passes?

  • CreatedNovember 14, 2014
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