If the Price of Coke Rises by 5 Percent and the Sales

question 57

Multiple Choice

If the price of Coke rises by 5 percent and the sales of Pepsi go up by 10 percent,we can conclude that

• A)The sign on the cross-price elasticity will be negative.
• B)Both goods are normal goods.
• C)Both goods are substitute goods because the cross-price elasticity is +0.5.
• D)Both goods are substitute goods because the cross-price elasticity is +2.

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Definitions:

North American Cars

Vehicles manufactured by companies based in North America, often characterized by specific styles, technologies, and branding typical of the region.

Origin

The fixed point in a coordinate system from which coordinates are measured, typically where the x-axis and y-axis intersect in a Cartesian coordinate system.

Driver

An individual who operates a vehicle, often used in the context of automobiles, but can apply to operators of other types of vehicles as well.

Staff

Collective term for the employees or personnel of an organization, often categorized based on their duties.