If,for Two Goods,the Cross-Price Elasticity of Demand Is 1

question 354

Multiple Choice

If,for two goods,the cross-price elasticity of demand is 1.25,then

• A) the two goods are luxuries.
• B) the two goods are substitutes.
• C) one of the goods is normal and the other good is inferior.
• D) the demand for one of the goods conforms to the law of demand,but the demand for the other good violates the law of demand.

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Definitions:

Abyssinia

Abyssinia is the historical name for the Ethiopian Empire, a kingdom in the Horn of Africa known for its ancient culture and resistance to colonial conquest.

British Government

The central government of the United Kingdom, consisting of the monarch, the Parliament, and the executive, responsible for national policy and administration.

Boers

Descendants of the Dutch-speaking settlers of the Cape Colony in southern Africa during the 17th and 18th centuries, known for their role in the Boer Wars against British rule.

Republic of the Transvaal

A historical 19th-century Boer state in Southern Africa that gained independence from the United Kingdom in 1852 until its annexation after the Second Boer War.