Good A has an income elasticity equal to 0.4 and a cross price elasticity with respect to Good B of 1.2 . Then:
a. Good A is an inferior good and Goods A and B are substitutes.
b. Good A is an inferior good and Goods A and B are complements.
c. Good A is a normal good and Goods A and B are substitutes
d. Good A is a normal good and Goods A and B are complements.
c
You might also like to view...
If the Fed wants to lower the U.S. exchange rate, what action should it take in the foreign exchange market? Why does the action lower the exchange rate?
What will be an ideal response?
Most new settlement in the West came from homesteads
Indicate whether the statement is true or false
Total satisfaction is maximized when
A) marginal utility is positive. B) marginal utility is negative. C) marginal utility is zero. D) marginal utility is equal to average utility.
If a price-taking firm selling in a competitive market raises the price of its product above the market-clearing price, it will: a. increase its profits
b. maintain its profit base since the demand for the product is inelastic. c. be able to increase its sales. d. not be able to sell any output.