When the Price of Erasers Increases from $1

question 105

Multiple Choice

When the price of erasers increases from $1.50 to $2.50, the quantity demanded of pencils is unchanged. The cross-price elasticity of demand between erasers and pencils is because erasers and pencils .

• A) 1; are substitutes
• B) ½; are complements
• C) 0; are normal goods
• D) 0; are unrelated
• E) -½; are complements

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Definitions:

Effort

The amount of physical or mental energy exerted towards achieving a task, goal, or objective.

Direction

Guidance or instructions on how to perform a task or reach a destination.

Intrinsic Motivation

The drive to engage in an activity for its own sake and personal rewards, rather than for some separable consequence or reward.

Extrinsic Motivation

Motivation driven by external rewards such as money, fame, grades, or praise, rather than internal satisfaction.