1. If the income elasticity of demand for lard is -3.00, that means that: a.lard

Question

1. If the income elasticity of demand for lard is -3.00, that means that:

a.lard is a substitute for butter

b.lard is a normal good

c. lard is an inferior good

d. more lard will be purchased when its price falls

2.Suppose that a 20 percent increase in the price of normal good Y causes a 10 percent decline in the quantity demanded of normal good X. The coefficient of cross elasticity of demand is:

a.negative and therefore these goods are substitutes

b.negative and therefore these goods are complements

c.positive and therefore these goods are substitutes

d.positive and therefore these goods are complements

Explanation / Answer

d. more lard will be purchased when its price falls

b.negative and therefore these goods are complements

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.