Multiple Choice
In September 2006, the Canadian Food Inspection Agency recommended that Canadians avoid eating imported raw spinach in the wake of an outbreak of E.coli bacteria in the United States.Following this recommendation, the food industry looked at alternatives and many turned to arugula.One U.S.distributor claimed, "The sale of the stuff has gone through the roof." Based on this information,
A) arugula is a normal good while raw spinach is an inferior good.
B) the cross-price elasticity between arugula and spinach is negative.
C) the cross-price elasticity between arugula and spinach is positive
D) the price elasticity of arugula is positive while the price elasticity of spinach falls to zero.
Correct Answer:

Verified
Correct Answer:
Verified
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