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Good a Has an Income Elasticity Equal to 1

Question 51

Multiple Choice

Good A has an income elasticity equal to 1.0 and a cross price elasticity with respect to Good B of -0.6. Then:


A) ​Good A is an inferior good and Goods A and B are substitutes.
B) ​Good A is an inferior good and Goods A and B are complements.
C) ​Good A is a normal good and Goods A and B are substitutes.
D) ​Good A is a normal good and Goods A and B are complements.

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