The cross-price elasticity of a complement is ______. The income elasticity of an inferior good is ______.

Question

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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 quantity demanded of its complement. This makes the first part of this option incorrect. The second part, that inferior goods have negative income elasticity, is correct, but since the first part is wrong, this option is not fully correct.
Option b: Negative; Positive. The first claim (negative cross-price elasticity for complements) is correct, but the second claim (positive income elasticity for an inferior good) is incorrect, because inferior goods have negative income elasticity—demand falls as income rises. This option misstates the second relationship.
Option c: Positive; Positive. Both parts are incorrect with respect to goods that are complements and inferior goods. A complement’s cross-price elasticity is not positive, and an inferior good does not have positive income elasticity.
Option d: Negative; Negative. This option asserts that the cross-price elasticity of a complement is negative, which matches the standard relationship: when the price of one good increases, demand for its complement decreases. It also asserts that the income elasticity of an inferior good is negative, since higher income reduces demand for inferior goods. Both statements are correct, making this the accurate pairing for the blanks.

ECON 302 AL1 SP25: Inter Microeconomic Theory (Buckley, B)

The cross-price elasticity of a complement is . The income elasticity of an inferior good is .

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类似问题

Which of these formulas represents an elastic response of y with respect to x, which is also called x-elasticity of y ?

If a policymaker wants to raise revenue by taxing goods while minimizing the deadweight losses, they should look for goods with _ elasticities of demand and _ elasticities of supply. (Fill in the blanks.)

What does it mean that elasticity equals escape?

The formula for all types of elasticity calculate follow a pattern:In the denominator, you put the Blank 1 Question 1[select: , initial change, reaction] in terms of percentage change.In the numerator, you put the Blank 2 Question 1[select: , reaction, initial change] in terms of percentage change.

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ECON 302 AL1 SP25: Inter Microeconomic Theory (Buckley, B)

The cross-price elasticity of a complement is ______. The income elasticity of an inferior good is ______.

查看解析

登录即可查看完整答案

类似问题

Which of these formulas represents an elastic response of y with respect to x, which is also called x-elasticity of y ?

If a policymaker wants to raise revenue by taxing goods while minimizing the deadweight losses, they should look for goods with _________ elasticities of demand and _________ elasticities of supply. (Fill in the blanks.)

What does it mean that elasticity equals escape?

The formula for all types of elasticity calculate follow a pattern:In the denominator, you put the Blank 1 Question 1[select: , initial change, reaction] in terms of percentage change.In the numerator, you put the Blank 2 Question 1[select: , reaction, initial change] in terms of percentage change.

更多留学生实用工具

希望你的学习变得更简单

The cross-price elasticity of a complement is . The income elasticity of an inferior good is .

If a policymaker wants to raise revenue by taxing goods while minimizing the deadweight losses, they should look for goods with _ elasticities of demand and _ elasticities of supply. (Fill in the blanks.)