Economists have estimated that the cross-price elasticity of demand between beer and spirits is -0.50, the income elasticity for spirits is 1.21 and the income elasticity for wine is 5.03
These elasticities mean that beer and spirits are ________, and spirits and wine are ________.
A) complements; substitutes B) substitutes; luxuries
C) complements; luxuries D) normal goods; luxuries
C
You might also like to view...
If a perfectly competitive firm manufacturing chairs produces 100 more chairs, what happens to the market price of a chair?
What will be an ideal response?
According to the Ricardian equivalence proposition, current deficits
A) will not affect consumption or national saving. B) will affect consumption but not national saving. C) will affect national saving but not consumption. D) will affect both consumption and national saving.
If a firm can borrow or lend at a 10 percent annual interest rate, it will
a. buy all units of capital with a marginal rate of return above 10 percent b. buy all units of capital with an average rate of return above 10 percent c. buy all units of capital with a marginal rate of return below 10 percent d. buy all units of capital with an average rate of return below 10 percent e. select only the unit of capital with the highest marginal rate of return, assuming it is above 10 percent
Consider a closed economy without a government and without international trade. What will be TRUE when this economy is in equilibrium?
A. Total planned real investment spending will exceed total planned real expenditures. B. Planned real consumption spending plus planned real investment spending equals real GDP. C. Planned real investment spending will exceed real planned saving. D. Planned real consumption spending equals real GDP.