Suppose the Cross-Price Elasticity of Demand Between Peanut Butter and Jelly

question 19

Multiple Choice

Suppose the cross-price elasticity of demand between peanut butter and jelly is −2.50. This implies that a 20 percent increase in the price of peanut butter will cause the quantity of jelly purchased to

• A)fall by 8 percent.
• B)fall by 50 percent.
• C)rise by 8 percent.
• D)rise by 50 percent.

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Definitions:

Carbon Chain

A series of carbon atoms linked together, which can be straight, branched, or arranged in rings, forming the backbone of organic molecules.

Triglycerides

A type of fat (lipid) found in your blood, used by the body for energy but high levels can increase the risk of heart disease.

Glycerol

A simple polyol compound that serves as a building block for lipids and can be converted into glucose by the liver.

Fatty Acids

Long chains of hydrocarbon molecules that are components of fats and oils, important in diet and metabolism.