Question : The cross elasticity of demand assesses how responsively a certain good's quantity desired is to changes in its prices.
Option 1: Its complements but not its substitutes.
Option 2: It's a substitute but not its complement.
Option 3: Its substitutes and complements
Option 4: Neither its substitutes nor its complements
Correct Answer: Its substitutes and complements
Solution : The cross elasticity of demand assesses how responsively consumers purchase one good when the price of another one changes. It complements and substitutes for other commodities. Hence option c is the correct answer.
Question : The cross elasticity of demand between CocaCola and PepsiCola is ________ so Coke and Pepsi are ________.
Option 1: Positive; complements
Option 2: Negative; substitutes
Option 3: Negative; complements
Option 4: Positive; substitutes
Question : Cross elasticity of demand measures the responsiveness of quantity demanded to changes in:
Option 1: Price of a substitute good.
Option 2: Price of a complementary good.
Option 3: Income.
Option 4: Both a) and b).
Question : Which one is not the type of elasticity of demand?
Option 1: Price elasticity of demand
Option 2: Income elasticity of demand
Option 3: Cross elasticity of demand
Option 4: Consumer elasticity of demand
Question : If the cross elasticity of demand between two goods is negative, it means the goods are:
Option 1: Substitutes.
Option 2: Complements.
Option 3: Inferior goods.
Option 4: Normal goods.
Question : If the cross elasticity of demand between two goods is zero, it means the goods are:
Option 3: Independent.
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