Questions
ECON 302 AL1 SP25: Inter Microeconomic Theory (Buckley, B)
Single choice
The cross-price elasticity of a complement is ______. The income elasticity of an inferior good is ______.
Options
A.a. Positive; Negative
B.b. Negative; Positive
C.c. Positive; Positive
D.d. Negative; Negative
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Step-by-Step Analysis
The question asks two separate sign properties in one sentence: the cross-price elasticity of a complement, and the income elasticity of an inferior good.
Option a: Positive; Negative. For complements, the cross-price elasticity is negative, because an increase in the price of one good typically reduces the ......Login to view full explanationLog in for full answers
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