If goods X and Y are such that the cross price elasticity between them is negative, and if the income elasticity of X is negative, then these goods are:
A) inferior complements.
B) luxury complements.
C) income elastic substitutes.
D) normal substitutes.
E) income elastic complements.

Question

Quizplus · Accepted Answer

If the cross-price elasticity between goods X and Y is negative, it means that they are complements. If the income elasticity of X is negative, it means that X is an inferior good.

Therefore, X and Y are inferior complements, which means that X is a lower quality, less expensive version of Y, and they are used together as complements.

If Goods X and Y Are Such That the Cross