Saturday 25 October 2008

additional exercise 2(bicycles)


a.What reasons might help explain the change in the pattern of traffic between cars and bicycles in China over the period described in the passage?
The reasons help the change in the pattern of traffic between cars and bicycles in China are:real incomes have risen,and many households have become much better off...
b.What would you expect to be the nature of income elasticity of demand for bicycles in China?
Negative income elasticity of demand.
c.What would you expect to be the nature of the income elasticity of demand for cars in China?
positive income elasticity of demand.

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