1. The quantity demanded of good A increases by 5 percent when the price of good B rises by 10 percent and other things remain the same. Calculate the cross elasticity of demand. Are goods A and B complements or substitutes? Describe how the demand for good A changes.

2. When income rises by 5 percent and other things remain the same, the quantity demanded of good C increases by 1 percent. Calculate the income elasticity of demand for good C. Is good C a normal good or an inferior good? Describe how the demand for good C changes.