When two goods are unrelated,
A. their cross price elasticity of demand will be 0.
B. their cross price elasticity of demand will be infinity.
C. their cross price elasticity of demand will be negative.
D. their cross price elasticity of demand will be positive.
Answer: A
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If a nonbinding price ceiling is imposed on a market, then the
A. price in the market will decrease. B. price in the market will increase C. quantity sold in the market will stay the same. D. quantity sold in the market will decrease.
The income elasticity of demand for haircuts is 1.5, and the income elas-ticity of demand for food is 0.14 . You take a weekend job, and the income you have to spend on food and haircuts doubles
If the prices of food and haircuts remain the same, will you double your expenditure on haircuts and double your expenditure on food? Explain why or why not.