Which of the Following Pairs of Goods Would Be Expected

question 42

Multiple Choice

Which of the following pairs of goods would be expected to have a positive cross-price elasticity of demand?

• A)coffee and tea.
• B)gasoline and large SUVs.
• C)tennis racquets and tennis balls.
• D)hot dogs and hot dog buns.

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Definitions:

Excise Tax

A tax imposed on specific goods, services, or transactions, often included in the price of the product, like alcohol, tobacco, and gasoline.

Deadweight Loss

The loss of economic efficiency that occurs when the equilibrium outcome is not achievable due to market failure or interventions.

Elasticity

A measure of how much the quantity demanded or supplied of a good responds to changes in price, income, or other factors.

Demand

The desire to purchase goods and services backed by the ability and willingness to pay a price.