for that product.
f. Long-run elasticity of supply for a product is than
short-run elasticity of supply because it usually takes time
for producers to adjust production in response to a
change in.
4. Fill in the blanks to make the following statements correct.
a. When a 20 percent change in income leads to a 2 percent
change in consumption of a good, we calculate the
income elasticity to be. We say this good is income
.
b. When a 20 percent change in income leads to a 30
percent change in consumption of a good we calculate
the income elasticity to be. We say this good is
income.
c. A normal good is one for which the income elasticity is
greater than. Quantity demanded as income rises.
d. An inferior good is one for which the income elasticity is
less than. Quantity demanded as income rises.
e. We refer to two goods as complements when, as the price
of one good increases, the quantity demanded of the
other good. Cross elasticity of demand is.
f. We refer to two goods as substitutes when, as the price of
one good increases, the quantity demanded of the other
good. Cross elasticity of demand is.
