Are textbooks complements or substitutes for air travel

Reference no: EM13177580

Alexander studies away from home. While at school, he spends all his income on air travel and economics textbooks. In a diagram with air-travel as the x-axis good, as pair increases while ptext remains unchanged, Alexander's price consumption path is horizontal.
a. How does Alexander's expenditure on air travel respond to changes in pair? Show that his demand for air travel is inversely proportional to pair.
b. What is the price elasticity of the demand for air travel?
c. Are textbooks complements or substitutes for air travel?

Reference no: EM13177580

Questions Cloud

Who has the most money in their account : Assuming both retire at 70, and that the interest rate both get on their investments is 10% (compounded annually) who has the most money in their account at age 70? Explain why you pick the answer you pick.

Calculate the income elasticity for chocolate : Are chocolate and textbooks complements or substitutes for Jen? b. Calculate the income elasticity for chocolate. Is chocolate a normal good? 2c. Assume we observe the following: Qt = 5; pc = 2; pt = 2.

How much of that total is interest : You wish to deposit $500 per month into an account for 36 months. Assume your interest rate is equal to the prime interest rate.

Prepare a cash flow forecast for the appropriate period : Prepare a cash flow forecast for the appropriate period. Assume that the restaurant will be run for six years, at the end of which the building could be sold for 300,000 pounds but the equipment will have no value at all

Are textbooks complements or substitutes for air travel : Alexander studies away from home. While at school, he spends all his income on air travel and economics textbooks. In a diagram with air-travel as the x-axis good, as pair increases while ptext remains unchanged, Alexander's price consumption path..

How to less the quantity of public goods : Suppose as well, that all voters favoring liberal candidates will vote, while only 50% of those favoring conservative candidates will vote. Create a graph to show how the political equilibrium will differ from an election in which all citizens vot..

What are the producer and consumer surplus : Find the equilibrium price and quantity (2) Find the price elastic of demand and the price elasticity of supply at the equilibrium in part (1) (3) What are the consumer surplus, producer surplus, and total welfare at the market equilibrium calculated..

Find the nearest distance from where a soldier placed : An apache helicopter of enemy is flying along the path given by y= x2 +7. Find the nearest distance from where a soldier placed at (3,7) can shoot down the helicopter.

What is the price elasticity of supply at equillibrium : Calculate the price elasticity of demand on the segment (arc) of the demand curve between the prices of $20 and $40(4) What is the price elasticity of supply calculated at the equilibrium calculated in part (2)? Is the supply of basketball coaching..

User Account

All Pages