If the cross-price elasticity of demand for two goods is 1.25, then
a. the two goods are luxuries.
b. the two goods are substitutes.
c. one of the goods is normal and the other good is inferior.
d. the demand for one of the goods conforms to the law of demand, but the demand for the other good violates the law of demand.
b
You might also like to view...
The aggregate supply curve slopes ________ because a ________ in the price level brings a ________ in the real wage rate
A) upward; rise; rise B) downward; fall; rise C) upward; rise; fall D) upward; fall; fall E) downward; rise; rise
Important factors that change the demand for dollars and hence shift the demand curve for dollars include which of the following?
I. interest rates around the world II. the current exchange rate III. the expected future exchange rate A) I and II B) I and III C) II D) I, II, and III
Which nation listed below is successfully transitioning from a planned economy to a hybrid market economy?
A. People’s Republic of China B. Japan C. United Kingdom D. United States
If the first four units of a good consumed have marginal utilities of 10, 9, 8, and 7, respectively, this trend is an indication of the:
a. law of diminishing marginal utility b. minimization of utility c. law of consumer equilibrium d. law of diminishing consumer surplus