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1. For _____ goods, income elasticity is positive. Instructions: You may select more than one answer....

1. For _____ goods, income elasticity is positive.

Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers.

a. normal

b. necessity

c. luxury

d. inferior

2. If a good has an income elasticity of 1.83, then it:

a. probably has a lot of close substitutes available.

b. is an inferior good, and a necessity.

c. is a normal good, and a necessity.

d. is a luxury.

2. If a good has an income elasticity of 1.83, then it:

a. probably has a lot of close substitutes available.

b. is an inferior good, and a necessity.

c. is a normal good, and a necessity.

d. is a luxury.

3. Suppose that when the price of peanut butter rises from $4 to $5 per jar, the quantity of jelly purchased falls from 15 million jars to 12 million jars.
Instructions: Round your answer to two decimal places and include a negative sign if appropriate.
The cross-price elasticity of demand between peanut butter and jelly using the midpoint method is ________.

The goods are ________ (Complements/substitute)

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