-In the Above Figure, If the Price of Good a Falls

question 324

Multiple Choice

-In the above figure, if the price of good A falls from P₀ to P₁ and the demand for good B increases from D₀ to D₁, then goods A and B

• A) are substitute goods.
• B) are inferior goods.
• C) will have a negative cross elasticity of demand.
• D) are both price elastic but not perfectly price elastic.

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Definitions:

Colonial Economy

Economic systems and practices in colonies, often characterized by exploitation of resources, labor, and the establishment of trade networks benefiting the colonial powers.

Townshend Duties

A series of British Acts passed in 1767 imposing taxes on the American colonies on goods such as tea, paper, and glass, leading to widespread protest.