Suppose That When the Price of Good X Falls from $10

question 15

Multiple Choice

Suppose that when the price of good X falls from $10 to $8,the quantity demanded of good Y rises from 20 units to 25 units.Using the midpoint method,

• A) the cross-price elasticity of demand is -1.0,and X and Y are complements.
• B) the cross-price elasticity of demand is -1.0,and X and Y are substitutes.
• C) the cross-price elasticity of demand is 1.0,and X and Y are complements.
• D) the cross-price elasticity of demand is 1.0,and X and Y are substitutes.

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Definitions:

Experimenters

Individuals who conduct research or trials to test hypotheses and observe outcomes.

Stands Alone

An entity or object that operates independently or exists without the need for external support or group inclusion.

Walks

The act of moving at a regular pace by lifting and setting down each foot in turn, not having one foot leave the ground before another touches it.

Months Old

A measure of age, especially used for infants and young children, expressed in how many months they have lived since birth.