Q1. You have the following information for your product:
• The price elasticity of demand is -0.9.
• The income elasticity of demand is 0.5.
• The cross-price elasticity of demand between your good and a related good is 2.0.
What can you determine about consumer demand for your product from this information?
Q2. How will an unexpected 3 percent fallin price levelin goods and services market differ from 1 percent inflation when 4 percent inflation had been expected? What impact would and have on the real price of resources, profit margins, output, and employment Explain?