If the Cross Price Elasticity of Demand Between Two Commodities

question 290

Multiple Choice

If the cross price elasticity of demand between two commodities is positive, then these commodities are

• A) are superior.
• B) are complements.
• C) are substitutes.
• D) are inferior.

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Definitions:

Decreasing Returns

A concept in economics where each additional unit of input results in a progressively smaller increase in output, often observed in production processes.

Marginal Product

The additional output that is produced by using one more unit of a particular input while holding other inputs constant.

Factor

An element or component, such as land, labor, and capital, that is used in the production of goods and services.

Isoquant

An isoquant is a curve that represents all the combinations of inputs that yield the same level of output in the production process.