If the Cross-Price Elasticity of Demand Between Good a and Good

question 52

Multiple Choice

If the cross-price elasticity of demand between Good A and Good B is 2 and the percentage change in price of Good A is 5 percent,what is the percentage change in quantity demanded of Good B?

• A) 3 percent
• B) 10 percent
• C) -1.25 percent
• D) 1.50 percent
• E) -3 percent

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Definitions:

IRA

An Individual Retirement Account, a saving tool that allows individuals to set aside money for retirement with tax advantages.

401k

A retirement savings plan that is sponsored and set up by an employer for its employees; like other retirement plans, there are strict rules as to when the money can be withdrawn without a penalty and strict contribution limits which change from year to year.

Mortality Table

A statistical table showing the probability of death for each age, used primarily by insurance companies to determine premiums.

Full Retirement Benefit

The total amount of money one is entitled to receive from a pension or retirement fund upon reaching the designated retirement age.