If the cross-price elasticity of demand between good x and good y is 0.4, then
a. the demand for good x is highly responsive to changes in the price of good y
b. a 10 percent increase in the price of good y leads to a 0.4 percent increase in the quantity demanded of good x
c. a 10 percent decrease in the price of good y leads to a 4 percent decrease in the demand for good y
d. good x and good y are complements
e. good x is a normal good and good y is an inferior good
C
You might also like to view...
Savings are an example of
A) a depreciation concept. B) a flow concept. C) a stock concept. D) an investment concept.
Assuming a long-run aggregate supply curve, a decrease in consumer confidence results in ________ in output and ________ in price level
A) a decrease; no change B) a decrease; a decrease C) an increase; no change D) no change; a decrease
According to historical data, what is the effect of a sharp change in the current account on the exchange rate (both in the short and long run)?
A) At first, home currency will depreciate as CA balance falls, but over time, currency will begin to depreciate. B) At first, home currency will appreciate as CA balance falls, but over time, currency will begin to depreciate. C) At first, home currency will appreciate as CA balance rises, but over time, currency will begin to depreciate. D) At first, home currency will depreciate as CA balance falls, but over time, currency will begin to appreciate. E) At first, home currency will appreciate as CA balance falls, but over time, currency will begin to appreciate.
If an increase in the price of a product from $1 to $2 per unit leads to a decrease in the quantity demanded from 100 to 80 units, then the value of price elasticity of demand is
a. elastic b. inelastic c. unit elastic d. suggestive of an inferior good e. equal to -20