1. Good U has a price elasticity of demand of 2.5 and Good Y has a price elasticity of demand of 0.7. Which of the following statements below describes these elasticities?

A. U has fewer substitutes than Y.

B. U is a good when there is an increase in income and Y is a good when there is a decrease in income.

C. U is a luxury and Y is a necessity.

D. The elasticity of U is likely to be a short-run measure and the elasticity of Y is likely to be a long-run measure.