If the Cross Elasticity of Demand Between Car Insurance and New

question 137

Multiple Choice

If the cross elasticity of demand between car insurance and new cars is -0.41,then car insurance and new cars are

• A) complements.
• B) substitutes.
• C) normal goods.
• D) inferior goods.
• E) unrelated goods.

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Definitions:

Spalling

Surface fatigue that occurs when chips, scales, or flakes of surface metal separate because of fatigue rather than wear.

Galling

A metal-to-metal wear failure characteristic caused by lack of lubricant or extreme overload.

Slip Yoke

A yoke that accommodates linear movement; the forward yoke in a drive shaft with female splines to which male splines in the main drive shaft tube are inserted to form a slip joint.