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

---

Definitions:

Absolute Rights

Fundamental rights that are universally recognized and protected, often considered inherent to human dignity and not subject to being taken away or abridged by laws.

Police Power

Power retained by each state to pass laws that protect the health, safety, and welfare of its citizens.

Citizenry

The total body of citizens of a particular place; denoting the inhabitants or constituents of a nation or area.

NLRB v. Jones & Laughlin Steel Corp.

A landmark United States Supreme Court decision that upheld the constitutionality of the National Labor Relations Act, allowing for stronger federal protection of workers' rights.