If the cross elasticity of demand between goods A and B is positive
A) the demands for A and B are both price elastic.
B) the demands for A and B are both price inelastic.
C) A and B are complements.
D) A and B are substitutes.
D
You might also like to view...
Relative percentage changes are used in measuring price elasticity of demand, so that
A) it does not matter whether price increases or decreases when calculating the elasticity. B) it does not matter what units are used to measure prices or quantities. C) we always obtain a positive number. D) larger numbers indicate greater responsiveness.
Use of real GDP to measure changes in national output from one period to another can be misleading if
a. the price level is different for the two periods. b. the share of production carried out in the nonmarket sector is different for the two periods. c. the bundle of goods produced during the periods is quite similar. d. the size of the export-import sector differs for the two periods.