a-3, b-4, c-2, d-1
a-3, b-1, c-4, d-2
a-2, b-3, c-1, d-4
a-1, b-2, c-3, d-4
Answer is Right!
Answer is Wrong!
The correct answer is: A. a-3, b-4, c-2, d-1
- Substitute goods are goods that can be used in place of each other. For example, coffee and tea are substitutes. If the price of coffee goes up, people will buy more tea, and vice versa. The cross elasticity of demand between two substitute goods is negative. This means that if the price of one good goes up, the demand for the other good will go down.
- Complementary goods are goods that are used together. For example, cars and gasoline are complementary goods. If the price of cars goes up, people will buy fewer cars, and therefore they will also buy less gasoline. The cross elasticity of demand between two complementary goods is positive. This means that if the price of one good goes up, the demand for the other good will also go up.
- Giffen goods are goods for which the demand increases as the price increases. This is because the good is a necessity for the consumer, and they are willing to pay more for it even if the price is higher. The cross elasticity of demand for a Giffen good is positive.
- High income group, consumption goods are goods that are typically consumed by people with high incomes. These goods are often luxury goods, such as expensive cars and jewelry. The price elasticity of demand for high income group, consumption goods is usually low. This means that even if the price of these goods goes up, people will still buy them because they can afford to.
I hope this explanation is helpful!