• 100% Satisfaction Guarantee

Bill, Tutor
Category: Homework
Satisfied Customers: 10
Experience:  7 years experience tutoring economics and mathematics
146882
Bill is online now

# Economics Elasticity

### Customer Question

An individual spends all his income on two goods, X and Y. If a \$2 increase in the price of X does not change the amount of Y consumed, what is the price elasticity of good X?
Submitted: 11 years ago.
Category: Homework
Expert:  Bill replied 11 years ago.
When a price change in good x causes no change in the consumption of good y, that means that good y is perfectly inelastic. This also implies that good x, relative to good y, is perfectly elastic.
Customer: replied 11 years ago.
Reply to Bill's Post: Is there any way of showing that? I think I'm supposed to show it with some math or something...
Expert:  Bill replied 11 years ago.

Well, in general the formula for elasticity will be 1/slope * P/Q for the point slope formula, or for the arc elasticity it is
[(change in Q)/(average Q)] / [(change in P)/(Avearge P)]. I don't think either of them can be used for your problem. This picture describes this problem, hopefully it helps. Basically it shows good x on the x axis, good y on the y axis, and showing the budget constraint shifting from the outer curve to the inner curve after the price change. It also shows that the amount of good y consumed does not change.

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

### What Customers are Saying:

• Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
< Previous | Next >
• Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
• This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
• Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
• I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin Kernersville, NC
• Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther Woodstock, NY
• Thank you so much for taking your time and knowledge to support my concerns. Not only did you answer my questions, you even took it a step further with replying with more pertinent information I needed to know. Robin Elkton, Maryland
• He answered my question promptly and gave me accurate, detailed information. If all of your experts are half as good, you have a great thing going here. Diane Dallas, TX

• ### LogicPro

#### Satisfied Customers:

4925
Expert in Java C++ C C# VB Javascript Design SQL HTML
< Last | Next >

### LogicPro

#### Satisfied Customers:

4925
Expert in Java C++ C C# VB Javascript Design SQL HTML

### Manal Elkhoshkhany

#### Satisfied Customers:

4538
More than 5000 online tutoring sessions.

### Linda_us

#### Satisfied Customers:

3138
Post Graduate Diploma in Management (MBA)

### Chris M.

#### Satisfied Customers:

2602
Master's Degree, strong math and writing skills, experience in one-on-one tutoring (college English)

### F. Naz

#### Satisfied Customers:

2126
Experience with chartered accountancy

### Bizhelp

#### Satisfied Customers:

1887
Bachelors Degree and CPA with Accounting work experience

### Seanna

#### Satisfied Customers:

1781
3,000+ satisfied customers, all topics, A+ work