-In the Above Figure, If the Two Goods a and B

question 461

Multiple Choice

-In the above figure, if the two goods A and B, are complements, which of the following is TRUE?

• A) The shift from D₀ to D₁ for good B leads to a shift from S₀ to S₁ for good A.
• B) The shift from S₀ to S₁ for good A leads to the shift from D₀ to D₁ for good B.
• C) The law of demand is violated in both markets.
• D) The cross elasticity of demand between them is positive.

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Definitions:

Price Elasticities

A measure of how much the quantity demanded of a good responds to a change in the price of that good.

Deadweight Loss

An economic inefficiency that occurs when the allocation of resources is not optimal, often resulting from taxes or monopolies.

Behavioural

Relating to or focusing on the actions or reactions of individuals, often in response to external stimuli.

Interviewer

A person who conducts an interview, often for the purpose of evaluating qualifications or obtaining information.