If a Price Hike of 5 Percent Increases the Quantity

question 277

Multiple Choice

If a price hike of 5 percent increases the quantity demanded of another good by 2 percent, the goods must be ________ and the cross elasticity of demand equals ________.

• A) substitutes; 0.40
• B) substitutes; 2.5
• C) complements; 0.40
• D) complements; 2.5

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Definitions:

Slope

Slope indicates the steepness or incline of a line, defined as the ratio of the vertical change to the horizontal change between two points on the line.

Curved Line

a line that continuously moves away from a straight direction but does not change in its degree of curvature.

Inclusive Language

The deliberate selection and use of vocabulary that avoids the exclusion of particular groups and that avoids the use of false generic terms (Canadian Race Relations Foundation, 2017).

Female Professor

A woman who holds a professorship at a college or university, engaged in teaching and often involved in research in her field of expertise.