The Price of Good B Increases by 4 Percent, Causing

question 271

Multiple Choice

The price of Good B increases by 4 percent, causing the quantity demanded of Good A to decrease by 6 percent. The cross-price elasticity of demand is ________, and the goods are ________.

• A) 1.5; substitutes
• B) -1.5; complements
• C) 0.67; complements
• D) -0.67; substitutes

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Definitions:

Fair Value

An estimate of the market value of an asset or liability, based on current prices in an orderly transaction between market participants.

Book Value

Book value is the value of an asset according to its balance sheet account balance, taking into account the cost of the asset minus any depreciation, amortization, or impairment costs.

Loss on Disposal

An expense recorded when an asset is sold for less than its carrying amount on the balance sheet.

Cash Proceeds

The actual amount of money received from transactions such as sales, financing, or the sale of assets.