If the Quantity of Tea Demanded Increases by 2% When

question 124

Multiple Choice

If the quantity of tea demanded increases by 2% when the price of coffee increases by 6%, the cross-price elasticity of demand between tea and coffee is

• A) -3.
• B) 0.33.
• C) 3.
• D) 12.

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Definitions:

True Burden

The actual economic impact of a tax or fiscal policy on individuals or entities, taking into account both direct and indirect effects.

Tax

A mandatory financial charge levied by a government on individuals, corporations, or other legal entities to fund government spending and various public expenditures.

Levied

The imposition or collection of a tax, charge, or fine.

Market Activity

The various transactions, movements, and behaviors of participants that occur within a marketplace, influencing the supply and demand of goods and services.