If the Cross-Price Elasticity of Demand Is -3, Then the Goods

question 224

Multiple Choice

If the cross-price elasticity of demand is -3, then the goods are __________ and the consumers' responsiveness would be characterized as __________.

• A)substitutes; inelastic
• B)substitutes; elastic
• C)substitutes; unit elastic
• D)complements; inelastic
• E)complements; elastic

Understand how transactions and events affect a company's financial position.

Recognize the role and requirements of Certified Public Accountants (CPAs).

Grasp the basic concepts of risk and return on assets.

Acknowledge the importance of ethics and the fraud triangle in accounting.

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Definitions:

Status Quo Bias

The tendency for people to prefer things to stay the same by doing nothing or sticking with a decision made previously.

Prospect Theory

A psychological theory that describes how people make decisions based on the potential value of losses and gains rather than the final outcome.

Endowment Effect

A psychological phenomenon where people ascribe more value to things merely because they own them.

Prospect Theory

A behavioral economic theory that describes how people make decisions under conditions of risk and uncertainty, prioritizing losses differently from gains.