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Question 106

Multiple Choice

  -Refer to the graphs above to answer this question.Suppose that the price of nuts decreases from P<sub>1</sub> to P<sub>2</sub> and the demand curve for chocolates shifts to the right from D<sub>1</sub> to D<sub>2</sub>.What is the relationship between nuts and chocolates? A) The demand for nuts and chocolates must be unit elastic. B) Nut and chocolates must be substitutes. C) The cross-elasticity coefficient of demand for both nuts and chocolates must be positive. D) Nuts and chocolates must be complements. E) There is no relationship between nuts and chocolates.
-Refer to the graphs above to answer this question.Suppose that the price of nuts decreases from P1 to P2 and the demand curve for chocolates shifts to the right from D1 to D2.What is the relationship between nuts and chocolates?


A) The demand for nuts and chocolates must be unit elastic.
B) Nut and chocolates must be substitutes.
C) The cross-elasticity coefficient of demand for both nuts and chocolates must be positive.
D) Nuts and chocolates must be complements.
E) There is no relationship between nuts and chocolates.

Correct Answer:

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