Answer the following statement(s) true (T) or false (F)
1. On average over all goods, it has been found that as people become wealthier, expenditures for higher quality grow more rapidly than expenditures for increased quantity.
2. The cross elasticity between California and Florida oranges is likely to be negative because they are substitutes for one another.
3. If the cross price elasticity of demand is negative, then the two goods under consideration must be complements.
4. If the cross-price elasticity for oranges with respect to apples is 1.2 and the price of apples increase by 5%, then we can expect the quantity demanded of oranges to decrease by 6%.
1. True
2. False
3. True
4. False
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A) vertical; demand B) horizontal; demand C) vertical; supply D) horizontal; supply