YED and XED

Question 1

YED calculation

Answer 1

% change in quantity demanded of a good / % change in real income

Question 2

Calculate cross elasticity of demand

Answer 2

% change in quantity demanded of good A / % change in price of good B

Question 3

If two goods are substitutes their XED will be

Answer 3

Positive

Question 4

If two goods are complements their XED will be

Answer 4

Negative