The Cross Elasticity of Demand for Butter and Margarine Is

question 284

Multiple Choice

The cross elasticity of demand for butter and margarine is likely to be

• A) positive because they are substitutes.
• B) positive because they are complements.
• C) negative because they are substitutes.
• D) negative because they are complements.
• E) positive because they are normal goods.

---

Definitions:

Marketing Loans

Loans that allow farmers to borrow against the value of their stored crops, which acts as collateral, providing them with liquidity while they wait for favorable market conditions to sell.

Special Interest Effect

The impact of interest groups or individual stakeholders in influencing government policy to benefit a small, specific group at the expense of the general public.

Large Group

A sizable collection of individuals or entities that share a common characteristic or are engaged in a common activity.

Smaller Group

A subset of a larger population or collection, typically characterized by fewer members or lesser size.