Suppose the Cross-Price Elasticity Between Two Goods Is 1

question 98

Multiple Choice

Suppose the cross-price elasticity between two goods is 1.5.If the price of one good increases by 10%,then the quantity demanded of the other good will:

• A)decrease by 15%.
• B)increase by 15%.
• C)decrease by 1.5%.
• D)increase by 1.5%.

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Definitions:

Public Saving

The difference between government receipts and government spending, representing the amount the government either saves or borrows.

Positive

In economics, referring to statements or analyses that are fact-based and describe the world as it is, rather than how it should be.

Budget Deficit

Occurs when a government spends more money than it receives in revenue over a specific period of time.

Public Savings

The difference between government revenue and government spending, representing a net saving or borrowing position.