Economists Estimated That the Cross-Price Elasticity of Demand for Beer

question 79

Multiple Choice

Economists estimated that the cross-price elasticity of demand for beer and wine is -0.83 and the income elasticity of wine is 5.03.This means that

• A)beer and wine are substitutes and wine is an inferior good.
• B)beer and wine are complements and wine is a luxury good.
• C)beer and wine are substitutes and wine is a luxury good.
• D)beer and wine are complements and wine is an inferior good.

---

Definitions:

Specialized Equipment

Equipment that is designed for a specific industry or task, often requiring unique skills or knowledge to operate.

Custom Homes

Houses that are designed and built according to the specifications of a particular buyer.

Job Order Costing

An accounting method that tracks costs and revenues by specific jobs and allows for detailed analysis of profitability.

Product Costs

The total costs directly associated with manufacturing a product, including materials, labor, and overhead.