If Two Goods,X and Y,have a Negative Cross Elasticity of Demand,then

question 17

Multiple Choice

If two goods,X and Y,have a negative cross elasticity of demand,then we know that they

• A)are substitutes.
• B)are complements.
• C)are both inferior goods.
• D)each have a price elasticity greater than one.
• E)are both normal goods.

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Definitions:

Federal Revenue

The income received by the federal government from taxes, fees, and other sources to fund its operations.

Auctioning Off

The process of selling an item to the highest bidder through a competitive bidding process, commonly used for selling goods, property, or services.

Import Quota

A government-imposed limit on the quantity of a specific good that can be imported into a country within a given timeframe.

Specific Tariff

A fixed fee imposed on imported goods based on quantity, such as units, weight, or volume, rather than value.