Economists Estimated That the Cross-Price Elasticity of Demand for Beer

question 79

Multiple Choice

Economists estimated that the cross-price elasticity of demand for beer and wine is -0.83 and the income elasticity of wine is 5.03.This means that

• A)beer and wine are substitutes and wine is an inferior good.
• B)beer and wine are complements and wine is a luxury good.
• C)beer and wine are substitutes and wine is a luxury good.
• D)beer and wine are complements and wine is an inferior good.

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Definitions:

Population Growth

The increase in the number of individuals in a population, often influenced by factors such as birth rates, death rates, and migration.

Renewable Resources

Natural resources that can replenish over time, such as sunlight, wind, rain, tides, and geothermal heat.

Fertile Soil

Soil that is rich in nutrients and organic matter, enabling it to support vigorous plant growth.

Natural Gas

A fossil fuel consisting mainly of methane, used as an energy source for heating, cooking, and electricity generation.