If the Cross-Price Elasticity Between Two Goods Is Positive, Then

question 74

Multiple Choice

If the cross-price elasticity between two goods is positive, then it is most likely that the two goods are

• A)both inferior goods.
• B)both luxury goods.
• C)complements.
• D)substitutes.
• E)necessities.

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Definitions:

Productive Demand

The demand for goods and services that are needed to produce other goods and services.

Average Real Hourly Earnings

The inflation-adjusted earnings of workers per hour, reflecting their purchasing power over time.

Rate of Inflation

The percentage increase in the general price level of goods and services in an economy over a period of time.

Annual Earnings

The total amount of money earned by an individual or entity in one year, before deductions such as taxes.