If the Cross Elasticity of Demand Between Two Goods Is

question 470

Multiple Choice

If the cross elasticity of demand between two goods is -0.56, then a fall in the price of one good leads to a ________ shift in the ________ of the other good.

• A) rightward; demand
• B) rightward; supply
• C) leftward; demand
• D) leftward; supply

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Definitions:

Common Stock

Shares entitling their holder to dividends that vary in amount and may even be omitted, unlike preferred stock which has a fixed dividend.

Book Value

The net value of a company's assets as shown on its balance sheet, calculated as total assets minus intangible assets and liabilities.

Equity Method

An accounting technique used to record an investment in another company, where the investment is initially recorded at cost and subsequently adjusted to reflect the investor's share of the net profit or loss of the investee.

Net Income

The total earnings of a company after subtracting all expenses from revenues, also known as the bottom line.