44) When two goods are relatod such that an increase in thre price of one good d

Question

44) When two goods are relatod such that an increase in thre price of one good decreases the other good, these goods are definitely A) normal goods B) luxury goods D) substitutes E) inferior goods. 45) The cross elasticity of demand for fim cameras and tim is Iikely to be A) positive because they are substtutes they are complements C) negative because they are substitutes D) negative because they are complements. E) negative because with the advent of digital cameras, fim and fim cameras are infericr goods 46) The income elasticity of A) how demand for a product changes when the price of a subsitute or complement product changes. B) how C) how responsive consumers are to changes in the price of a product suppliers are to changes in the price of a product. Ej the extent to which the supply of a good changes when the demand changes as a result of a change in income. 47) The income elasticity of demand is A) positive for a normal good. B) zero for an inferior good. C) less than one for an income elastic normal good. D) Only answers A and B are correct. 48) The income elasticity of demand for sking trips to Vermont is greater than one. Thus a trip to Vermont for sking is A a normal B) an inferior a unit lastic 7Page

Explanation / Answer

44. Correct option: Complements

Reason: In case of complementary goods which are consumed together, like bread and butter, an increase in price of ome good reduces that good's demand and also compelementary good's demand as well.

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