If Goods a and B Are Complements, Then

question 306

Multiple Choice

If goods A and B are complements, then

• A) the cross elasticity of demand between A and B is negative.
• B) the cross elasticity of demand between A and B is positive.
• C) their income elasticities of demand are both greater than 1.
• D) their income elasticities of demand are both less than 1.

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Definitions:

Revenue Accounts

Accounts that track the income earned by a business from its operational activities, such as sales of goods or services.

Credit

An accounting entry that increases the balance of liabilities and equity accounts, or decreases the balance of an asset or expense account.

Stockholders' Equity

The equity held by stockholders in a corporation, determined by subtracting total liabilities from total assets.

Dividends Account

An account used in accounting to track distributions of earnings paid to shareholders.