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

question 158

Multiple Choice

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

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

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Definitions:

Ceteris Paribus

A Latin phrase meaning "all other things being equal," used in economics to isolate the effect of one variable.

Production

The process of combining various material inputs and immaterial inputs (plans, know-how) to make something for consumption.

Labor Demand Curve

A graphical representation showing the relationship between the wages paid to workers and the number of workers that employers are willing to hire.

Marginal Product

The additional output that is produced by using one more unit of a variable input.