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: D. a-1, b-2, c-3, d-4
- Substitute goods are goods that can be used in place of each other. For example, coffee and tea are substitute goods. If the price of coffee increases, 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 increases, the demand for the other good will increase.
- Complementary goods are goods that are used together. For example, cars and gasoline are complementary goods. If the price of cars decreases, people will buy more cars, and they will also buy more gasoline. The cross elasticity of demand between two complementary goods is positive. This means that if the price of one good increases, the demand for the other good will decrease.
- Giffen goods are goods that have an inverse relationship between price and demand. This means that when the price of a Giffen good increases, the demand for the good also increases. Giffen goods are rare, but they can exist in certain circumstances. For example, if a person’s income is very low, and a good like bread is a large part of their budget, then a decrease in the price of bread may not lead to an increase in the demand for bread. This is because the person may have already been buying as much bread as they could afford, and the decrease in price would not give them enough additional income to buy more bread. However, if the price of bread increases, the person may have to reduce their spending on other goods in order to afford bread, and this may lead to an increase in the demand for bread.
- High-income group is a group of people with a high level of income. The demand for goods and services tends to be higher for high-income groups than for low-income groups. This is because high-income groups have more money to spend, and they are more likely to be able to afford luxury goods and services.
I hope this explanation is helpful. Let me know if you have any other questions.