Suppose That a 7 Percent Increase in the Price of Normal

question 266

Multiple Choice

Suppose that a 7 percent increase in the price of normal good Y causes a 4 percent increase in the quantity demanded of normal good X. The coefficient of cross elasticity of demand is

• A)negative, and therefore these goods are substitutes.
• B)positive, and therefore these goods are substitutes.
• C)negative, and therefore these goods are complements.
• D)positive, and therefore these goods are complements.

---

Definitions:

Credits

Entries on the right side of an account, indicating an increase in liabilities, equity, or revenue, or a decrease in assets or expenses.

Posting Reference Notation

A unique code or number used to track the entry of a transaction in the accounting records to its source document.

Journal

A book or electronic record in which transactions are recorded in chronological order before they are posted to ledger accounts.

Page Number

A number assigned to a specific page in a document or book to facilitate organization and reference.