Economists estimated that the cross-price elasticity of demand for beer and wine is -0.83 and the income elasticity of wine is 5.03. This means that
A) beer and wine are substitutes and wine is a luxury good.
B) beer and wine are substitutes and wine is an inferior good.
C) beer and wine are complements and wine is a luxury good.
D) beer and wine are complements and wine is an inferior good.
C
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At equilibrium in a market for a product, the total revenues received by sellers equal the
A. market producer surplus. B. total amount spent by buyers on the product. C. market consumer surplus. D. total profit of sellers.
In the above figure, an increase in aggregate demand has resulted in
A) a decline in the price level. B) economic growth. C) an inflationary gap. D) a recessionary gap.
Managers of profit centers are usually given a lot of discretion because
a. They always do an excellent job b. They rarely do a good job c. The company can never judge their performance d. It is relatively easy to tie management pay to division performance
For market efficiency, MSC must be equated to MSB.
A. True B. False C. Uncertain