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:

Favorable Perceptions

Positive interpretations or views held by individuals about something or someone, often influenced by personal beliefs or experiences.

Pay Checks

Regular payments made by employers to employees as compensation for their work.

Different Behaviors

Variations in actions or reactions of individuals, often influenced by internal or external factors.

Beliefs

Strongly held notions or convictions that individuals hold to be true, influencing their thoughts, feelings, and actions.