Good a Has an Income Elasticity Equal to 1

question 51

Multiple Choice

Good A has an income elasticity equal to 1.0 and a cross price elasticity with respect to Good B of -0.6. Then:

• A)​Good A is an inferior good and Goods A and B are substitutes.
• B)​Good A is an inferior good and Goods A and B are complements.
• C)​Good A is a normal good and Goods A and B are substitutes.
• D)​Good A is a normal good and Goods A and B are complements.

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Definitions:

Intercostal Muscles

Muscles located between the ribs that aid in the process of breathing by controlling the expansion and contraction of the chest cavity.

Elevate Ribs

The action of lifting the ribs through muscle contraction, which increases the volume of the thoracic cavity to aid in inhalation.

Emphysema

A long-term, progressive disease of the lungs characterized by a loss of elasticity and enlargement of air spaces, leading to breathing difficulties.

Trachea

A large tube in the respiratory system that connects the larynx to the bronchi, allowing air passage to the lungs.