The cross elasticity of demand between Good J and Good K is 0.25, whereas the cross elasticity of demand between Good J and Good L is 1.5. What can we conclude?

A.Good J is a closer substitute for Good K than it is for Good L.

B.Good J is a closer substitute for Good L than it is for Good K.

C.Good J is a closer complement for Good K than it is for Good L.

D.Good J is a closer complement for Good L than it is for Good K

2. Your income rises from $45,000 to $55,000, and the demand for Product B rises from 95 to 105 units. What is the income elasticity of demand?

A.0.5

B.1.0

C.2.0

D.2.5

3. Income elasticity for Good A is -0.7, and its cross elasticity with Good B is -0.7. Which of the following will increase the demand for Good A the most?

A. An increase in income and an increase in the price of Good B

B. An increase in income and a decrease in the price of Good B

C. A decrease in income and an increase in the price of Good B

D. A decrease in income and a decrease in the price of Good B

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The detailed answer for the above question is provided below Quiz Correct answer A Good J is a closer substitute for Good K than it is for Good L The ... View the full answer