Suppose That a 10 Percent Increase in the Price of Normal

question 38

Multiple Choice

Suppose that a 10 percent increase in the price of normal good Y causes a 20 percent increase in the quantity demanded of normal good X. The coefficient of cross elasticity of demand is

• A)negative, and therefore these goods are substitutes.
• B)negative, and therefore these goods are complements.
• C)positive, and therefore these goods are substitutes.
• D)positive, and therefore these goods are complements.

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Definitions:

Experience

Experience refers to the knowledge or skill acquired by observing, encountering, or undergoing events or situations.

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The ability to do something well, usually gained through training or experience.

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The dynamic interactions between an individual and their environment, including how people shape, and are shaped by, their surroundings.