There are three goods you are interested in purchasing, X, Y, and Z. You notice that the price of Z has fallen. Given that the cross elasticity between Z and Y is –1.5 and the cross price elasticity between Y and X is 3.0, it would make sense that
a. Y and X are substitutes; X and Z are substitutes
b. Z and X are complements; Y and X are substitutes
c. Y and X are substitutes; Y is complementary to Z
d. X and Z are unrelated; Y is complementary to X
e. X and Z are complements; Y and Z are substitutes
C
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Anna's Antiques expects to get two bidders for the unique china teacup it sells. Each of the bidders can either have a high-value of $100 or a low-value of $70 with equal probability. What combinations of customers can Anna expect?
a. High value, high value b. High value, low value c. Low value, low value d. All of the above
When they are confronted with an adverse shock to aggregate supply, policymakers face a difficult choice in that
a. if they contract aggregate demand, the unemployment rate will increase further. b. if they expand aggregate demand, the inflation rate will increase further. c. they face a less favorable trade-off between inflation and unemployment than they did before the shock. d. All of the above are correct.
The pleasure or satisfaction obtained from goods and services is known as:
A. Price elasticity of demand. B. Total revenue. C. Utility. D. Ceteris paribus.
The patented outcome of a research project financed by a private organization is a private good.
Answer the following statement true (T) or false (F)