Final answer:
The 'multiplier' for an increase in price from $85 to $93.50 is 1.10, reflecting a 10% increase. The cross-price elasticity for left and right shoes, if bought separately, would be theoretically perfectly inelastic as they are complementary goods.
Step-by-step explanation:
The student is asking how to calculate the multiplier given the cost of an item that has increased from $85 to $93.50. The multiplier for this problem is found by dividing the new cost by the original cost, which can be calculated as follows: $93.50 / $85 = 1.10. Therefore, the multiplier is 1.10, indicating that there has been a 10% increase in price from yesterday to today.
If we extend this question to analyzing the cross-price elasticity for left shoes and right shoes assuming they could be bought separately, we would predict a cross-price elasticity that is perfectly inelastic, meaning it would be close to 0. This is because the demand for left shoes and right shoes would be directly linked; a change in the price of one would not alter the quantity demanded for the other since they are complementary goods. However, this is a theoretical situation as shoes are typically sold in pairs.