If Tea and Coffee Are Substitutes, the Cross Elasticity of Demand

question 126

Multiple Choice

If tea and coffee are substitutes, the cross elasticity of demand for coffee with respect to the price of tea will be _______ and an increase in the price of tea will _______ the demand for coffee.

• A) negative; decrease
• B) negative; increase
• C) positive; increase
• D) positive; decrease

Recognize the importance of time value of money in financial planning.

Identify and develop personal financial goals and understand the financial planning process.

Understand the components and importance of financial planning.

Recognize the steps in the financial planning process and their significance.

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Definitions:

Unilateral Contract

An agreement in which one party makes a promise in exchange for an act performed by another party.

Consideration

In contract law, a crucial element that refers to something of value promised to another when making a contract.

Liquidated Debt

Debt for which there is no dispute between the parties about the fact that money is owed and the amount of money owed.

Enforceable Accord

An agreement that is legally binding and can be upheld in court.