Good a Has an Income Elasticity Equal to 1

question 51

Multiple Choice

Good A has an income elasticity equal to 1.0 and a cross price elasticity with respect to Good B of -0.6. Then:

• A)​Good A is an inferior good and Goods A and B are substitutes.
• B)​Good A is an inferior good and Goods A and B are complements.
• C)​Good A is a normal good and Goods A and B are substitutes.
• D)​Good A is a normal good and Goods A and B are complements.

---

Definitions:

Long-Term Mortgages

Mortgage loans with extended repayment periods, typically ranging from 15 to 30 years, allowing for smaller monthly payments.

Supreme Court

The highest judicial body in the United States, responsible for interpreting the Constitution and reviewing laws to ensure they adhere to it.

Unconstitutional

A term referring to actions or laws that violate the constitution of a country or organization.

National Recovery Administration

A New Deal agency, established in 1933, aimed at stabilizing the U.S. economy through regulation of wages, prices, and working hours.