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3 marksElasticity of Demand and Supply

CSEC Economics · May/June 2016 · Paper 2 · Question 2(d)(i)

The price of Good A increases from 2 to 4, leading to a fall in demand for Good B from 10 units to 5 units.

Calculate the cross-price elasticity of demand using the provided information.

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Other parts of this question

  1. 2(a)Define the term 'market failure'.[2 marks]
  2. 2(b)List THREE causes of market failure.[3 marks]
  3. 2(c)(i)Explain the impact on the demand curve when the price of a good falls.[3 marks]
  4. 2(c)(ii)Explain the impact on the demand curve when the income of the population rises.[3 marks]
  5. 2(d)(ii)Determine the classification of Good A in relation to Good B based on the result obtained in (d)(i).[1 mark]

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