If There Are Only Two Goods, an Increase in the Price

question 27

Multiple Choice

If there are only two goods, an increase in the price of good 1 will increase the demand for good 2

• A)if and only if the price elasticity of demand for good 2 is greater than 1 in absolute value.
• B)whenever both goods are normal goods.
• C)only if the two goods are perfect substitutes.
• D)never.
• E)none of the above.