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erik [133]
3 years ago
5

If the income elasticity of demand for good X is negative and the cross-price elasticity of demand between good X and good Y is

negative, which of the following must be true of good X
Business
1 answer:
Stella [2.4K]3 years ago
4 0

Answer:

Good X is Inferior Good, Good X is complementary good of Good Y.

Explanation:

Demand : Buyers ability & willingness to buy given price - has 4 factors (price of good, income, price of related goods, Taste).

Based on Income : Normal Goods demand vary directly with Income, more demand at higher income & vice versa. Eg: Normal grains like Wheat, Rice. Inferior Goods demand vary inversely with Income, more demand at lower income & vice versa. Eg: Low grade, cheap grains like Bajra.

Price of Related Goods: Related Goods can be Substitutes or Complements.  Substitute (interchangeable) goods price are directly related a with good's demand because - substitute price rise makes the good relatively cheap, increases its demand & vice versa. Complementary (together used) goods price are inversely related with a good's demand because - complements price rise makes the product combination expensive, decreases its demand & viceversa. 1st eg: Coke, Pepsi ; 2nd eg: Tea, Sugar.

If income elasticity of demand for good X is negative : implies it varies inversely with Income - It is an Inferior Good

If Cross Price Elasticity of demand between good X and good Y is negative : Implies Y's prices & X's demand vary inversely - Both are complements of each other.

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I may be wrong but I think its D) claim
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4 0
3 years ago
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An investment project provides cash inflows of $615 per year for eight years. a. What is the project payback period if the initi
aksik [14]

Answer:

It will take 3 years and 66 days to pay for the initial investment.

Explanation:

Giving the following information:

Cash flows= $615 for 8 years

Initial investment= $1,750

<u>The payback period is the time required to cover for the initial investment.</u>

<u></u>

Year 1= 615 - 1,750= -1,135

Year 2= 615 - 1,135= -520

Year 3= 615 - 520= 95

Exactly:

(95/520)= 0.18*365= 66

It will take 3 years and 66 days to pay for the initial investment.

8 0
3 years ago
Suppose the demand for good X is given by Qdx = 10 + axPx + ayPy + aMM. From the law of demand we know that ax will be: less tha
diamong [38]

Answer:

less than zero

Explanation:

According to the law of demand, an increase in price reflects in a decrease in demad. That is, price and demand are inversely proportional. Since ax is associated with the price of good X, it must be negative to accurately describe that behavior in the demand function.

Thus, ax will be: less than zero.

6 0
3 years ago
Which is an example of someone who is cyclically unemployed?
Korolek [52]

Answer:

<em>A. autoworker who is temporarily laid off from an automobile company because of a decline in sales. </em>

Explanation:

Cyclical unemployment is <em>unemployment that occurs when full employment can not be met by the aggregate demand for goods and services in an economy.</em>

This takes place during times of decreased economic growth or times of economic slowdown.

Cyclical unemployment is directly linked to the degree of macroeconomic behavior, which is the combined or collective activity of all economically involved individuals and entities.

Instead of linear, this overall trend is cyclical-economic activity tends to increase and fall rather than always rising or falling.

7 0
3 years ago
At the end of the current year, Accounts Receivable has a balance of $675,000; Allowance for Doubtful Accounts has a debit balan
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Answer and Explanation:

The computation is shown below:

a.

The amount of the adjusting entry for bad debt expense should be

= $45,000 + $5,400

= $50,400

The journal entry should be  

Bad Debt Expense Dr. 50,400

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(Being the bad debt expense is recorded)

b.    

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Allowance for Doubtful Accounts 45,000

Bad Debt Expense 50,400

c.    

Accounts Receivable 675,000

Less: Allowance for Doubtful Accounts  (45,000)

Net realizable value of accounts receivable 630,000

4 0
3 years ago
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