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Case elasticities

  1. Feb 18, 2008 #1
    Identify the case elasticities for the following goods. Explain.
    a)bread and butter
    b)alcohol and gum
    c)peanut butter and jam
    d)coffee and tea
    e)margerine and butter

    a),c),d) --> complements

    b) --> unrelated

    e) --> substitutes
     
  2. jcsd
  3. Feb 18, 2008 #2

    EnumaElish

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    Never heard of "case elasticity."

    Do you mean "cross elasticity"?

    Are coffee & tea complements?

    Do you need to report the sign of the cross elasticity? For example, "substitutes imply cross elasticity > 0"?
     
  4. Feb 18, 2008 #3
    Oops, yep it's cross elasticity =)

    I think coffee and tea are compliments but not sure if it's right though....

    Not sure how to relate the signs with the info. Can you briefly explain what each one means and I'll post the answers to see if I get them right.
     
  5. Feb 18, 2008 #4

    EnumaElish

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    I am not sure which definition of "complements" and "substitutes" you are using. Can you post the definition for each?
     
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