Economists Have Estimated That the Cross-Price Elasticity of Demand Between

question 265

Multiple Choice

Economists have estimated that the cross-price elasticity of demand between beer and spirits is -0.50, the income elasticity for spirits is 1.21 and the income elasticity for wine is 5.03. These elasticities mean that

• A) beer and spirits are complements; spirits and wine are luxuries.
• B) beer and spirits are normal goods; spirits and wine are luxuries.
• C) beer and spirits are complements; spirits are substitutes.
• D) beer and spirits are substitutes; spirits and wine are luxuries.

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Definitions:

Molecular Formula

A representation of the types and numbers of atoms present in a molecule, showing the exact composition of that molecule.

Branched Alkanes

Hydrocarbons that contain a main chain of carbon atoms with one or more side chains or branches, affecting their physical and chemical properties.

Linear Alkanes

Alkanes that consist of carbon atoms arranged in a straight chain, without any branches.

Methylpentane

A hydrocarbon molecule with the chemical formula C6H14, representing an isomer of hexane, used in various chemical applications.