IB Multiple Choice - Other Elasticities

Test yourself on IB Multiple Choice - Other Elasticities

• The average annual income rises from $25,000 to $38,000, and the quantity of bread consumed in a year by the average person falls from 30 loaves to 22 loaves.
  
  In this example, what type of good is bread?

• The average annual income rises from $25,000 to $38,000, and the quantity of bread consumed in a year by the average person falls from 30 loaves to 22 loaves.
  
  What is the income elasticity of bread consumption?

• Suppose the cross-price elasticity of apples with respect to the price of oranges is 0.4, and the price of oranges falls by 3%. What will happen to the demand for apples?

• What is the correct formula for the income elasticity of demand?

• Suppose the cross-price elasticity of PlayStation consoles with respect to the price of Xbox consoles is 0.7, and the price of Xbox consoles falls by 10%. What will happen to the demand for PlayStation consoles?