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

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter20: Elasticity: Demand And Supply

Section: Chapter Questions

Problem 6E

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