If a Lower Price for Good X Increases the Demand

question 277

Multiple Choice

If a lower price for good X increases the demand for good Y,the cross elasticity value for the two goods is

• A) negative.
• B) equal to zero.
• C) positive and less than one.
• D) positive and greater than one.
• E) possibly negative, positive, or zero, but there is not enough information to decide.

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Definitions:

Binding Constraint

A restriction or limitation that significantly impacts decision-making or the feasibility of certain actions within an economic model or real-world scenario.

Binding Price Ceiling

A government-imposed limit on the price of a good or service that is set below the market equilibrium price, leading to shortages.

Buyers

Buyers are individuals or entities that purchase goods and services for personal use, resale, or production.

Rent Control

Government policies or laws that limit the amount landlords can charge for leasing property to keep housing affordable for renters.