What is the difference between the cross-elasticity of demand for two goods which are substitutes and two goods which are complements?
If the goods are substitutes, the cross-elasticity of demand is positive, and if they are complements the cross elasticity of demand is negative.
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Bindy, an 18-year-old high school graduate, and Luciana, a 40-year-old college graduate, just purchased identical hot new sports cars. Acme Insurance charges a higher rate to insure Bindy than Luciana. This practice is an example of:
A) collusion. B) price discrimination. C) two-part tariff. D) bundling. E) none of the above
A change in which of the following will have a direct effect on the amount of money individuals wish to hold in the current period?
A) the current nominal interest rate B) the current real interest rate C) the expected future nominal interest rate D) the expected future real interest rate E) all of the above