cross elasticity of demand

The more time persons have to find a substitute when the price of the good changes the more elastic is the good or service

• TRUE

• FALSE

1. Complements are goods which are in joint demand

• TRUE

• FALSE

The cross elasticity of demand for substitutes will always be negative because the when the price of product A increases the quantity demanded of product B also increases

• TRUE

• FALSE

1. A 5% rise the price of beef decreased quantity of beef demanded by 10% and increase the quantity demanded of chicken by 15%

(i) Calculate the cross elasticity of demand between beef and chicken

• 1/3

• 3

• 2

• 1/2

If the cross elasticity of demand for product A is zero then product A and Product B are complements

• TRUE

• FALSE

If the cross-price elasticity between two commodities is 1.5,

• the two goods are luxury goods.

• the two goods are complements.

• the two goods are substitutes.

• the two goods are normal goods.

It is reasonable to expect the cross price elasticity of demand for golf clubs and golf balls to be positive

• True

• False

• Uncertain

If the cross-price elasticity between two commodities is 1.5,

• the two goods are luxury goods.

• the two goods are complements.

• the two goods are substitutes.

• the two goods are normal goods.

Why does demand generally become more elastic over time?

• People don't change their shopping behavior over time.

• Few substitutes become available.

• People buy more products over time.

• People have time to find substitutes and change behaviors.

If two goods have negative price cross‑elasticities of demand, the goods are:

• inferior goods.

• luxury goods.

• complementary goods:

• substitute goods.