Suppose That a 20 Percent Increase in the Price of Normal

question 195

Multiple Choice

Suppose that a 20 percent increase in the price of normal good Y causes a 10 percent decrease 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)negative, and therefore these goods are complements.
• C)positive, and therefore these goods are substitutes.
• D)positive, and therefore these goods are complements.

---

Definitions:

Basic Skills

Fundamental abilities in areas such as reading, writing, math, and communication necessary for effective participation in society and the workforce.

Phonetic-fluency Approach

A method of language learning that emphasizes the mastery of sounds and pronunciation to facilitate fluency.

Critical Thinking

The ability to analyze facts, generate and organize ideas, defend opinions, make comparisons, draw inferences, evaluate arguments, and solve problems.

Manufactured

Produced in large quantities using machinery in factories, as opposed to being made by hand.