2. Which of the following statements is (are) correct? (x) If the coefficient of cross-price elasticity of demand is 1.4, then the two goods are substitutes and the response to a price change is elastic. (y) If the coefficient of cross-price elasticity of demand is equal to one, then the two goods are substitutes and a price increase of ten percent for one good will cause the quantity purchased of the other good to increase by ten percent. (z) If the coefficient of cross-price elasticity of demand for a particular good is equal to negative 0.85, then the two goods are complements and the response to a price change of the other good is elastic. А. (x), (y) and (z) С. В. (x) and (y) only (x) and (z) only E. D. (y) and (z) only (x) only

2. Which of the following statements is (are) correct? (x) If the coefficient of cross-price elasticity of demand is 1.4, then the two goods are substitutes and the response to a price change is elastic. (y) If the coefficient of cross-price elasticity of demand is equal to one, then the two goods are substitutes and a price increase of ten percent for one good will cause the quantity purchased of the other good to increase by ten percent. (z) If the coefficient of cross-price elasticity of demand for a particular good is equal to negative 0.85, then the two goods are complements and the response to a price change of the other good is elastic. А. (x), (y) and (z) С. В. (x) and (y) only (x) and (z) only E. D. (y) and (z) only (x) only

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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