The Cross Price Elasticity of Demand Between Goods X and Y

question 40

Multiple Choice

The cross price elasticity of demand between goods X and Y is -3.5.If the price of X decreases by 7%, the quantity demanded of Y will:

• A)decrease by 24.5%.
• B)decrease by 2.45%.
• C)increase by 24.5%.
• D)increase by 2.45%.

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Definitions:

Robert Heilbroner

An American economist known for his works on the history of economic thought and capitalism.

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Supremacy Clause

A clause in the U.S. Constitution declaring that federal law takes precedence over state law if there is a conflict between them.

Federal Law

Federal law refers to the body of law created by the national government of a country, which applies to the entire country and takes precedence over state or local laws.