2) If the price of one good increases, and as a result the demand for another related good falls,…

2) If the price of one good increases,
and as a result the demand for another related good falls, the goods are

A) substitutes.

B) normal goods.

C)
complements.

D) inferior goods.

Chapter 21 Demand and Supply
Elasticity 605
.png”>

3)
Two items which have a positive cross price elasticity of
demand are referred to as

A)
luxury goods.

B)
inferior goods.

C)
substitutes.

D)
complements.

4)
Two items which have a negative cross price elasticity of
demand are referred to as

A)
luxury goods.

B)
inferior goods.

C)
substitutes.

D)
complements.

5)
If
the value of the cross elasticity of demand is negative, the two goods are

A)
complementary
goods.

B)
substitute
goods.

C)
normal
goods.

D)
inferior
goods.

6)
The
cross price elasticity of demand is defined as

A)
the percentage change in the supply for one good (a shift
in the supply curve) divided by the percentage change in price of a related
good.

B)
the percentage change in demand for two different
commodities.

C)
the percentage change in the demand for one good (a shift
in the demand curve) divided by the percentage change in price of a related
good.

D)
the percentage change in price for two different
commodities.

606
Miller· Economics Today, Fourteenth
Edition

7) If the price of one good increases,
and as a result the demand for another good increases, the goods are

A) substitutes.

B) normal goods.

C)
complements.

D) inferior goods.
.png”>

8) If the cross price elasticity of
demand between two commodities is positive, then these commodities are

A) are superior.

B) are complements.

C)
are
substitutes.

D) are inferior.

9) If the price of apples went up by 25
percent, which of the following values of the cross price elasticity for
oranges would be most reasonable to anticipate?

A) 0.0

B) 1.2

C) -2.5

D) -1.0

10) If the price of apples went up by 25
percent, which of the following values of the cross price elasticity for cars
would be most reasonable to anticipate?

A) 0.0

B) 1.2

C)
-2.5

D) -1.0

Chapter 21 Demand and Supply
Elasticity 607

.png”>

.jpg”>

11) Use the above figure. Which graph
depicts complementary goods?

A)
A

B)
B

C) C

D) D
12) Use the above figure. Which graph
depicts substitute goods?

A)
A

B)
B

C)
C

D)
D

13) If the price of wireless phone
service decreases and the demand for wired phone services decreases, then wired
and wireless phone services are

A)
substitutes.

B)
complements.

C)
inferior
goods.

D)
elastic goods.

608
Miller· Economics Today, Fourteenth Edition

.png”>

21.6 Income Elasticity of Demand

.jpg”>

1)
Use
the above figure. Which graph depicts an inferior good? A) A B) B C)
C
D) D

 

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