Another interesting post from Geoff Riley on XED ad from the BBC on American car sales
http://www.tutor2u.net/blog/index.php/economics/comments/oil-prices-and-demand-for-scooters-cross-elasticity/
http://news.bbc.co.uk/1/hi/business/7482963.stm
a) Define XED
b) Would the XED for scooters/small Honda cars in response to a rise in the price of oil be +ve or -ve?
c) What does this tell you about the relationship?
d) Would the XED for SUV's/pick up trucks in response to a rise in the price of oil be +ve or -ve?
e) What about the XED for the complements for scooters mentioned in the article?
For those of you who would like to follow up on these ideas there is this great article from the Guardian on how American consumer behaviour is changing as the result of soaring petrol prices in the USA
http://www.guardian.co.uk/environment/2008/jul/02/fossilfuels.travelandtransport
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