Question
Question 1. [5 points] If the cross-price elasticity of demand between chocolates andicecreams is 0.5, then are chocolates and icecreams substitutes or complements? Explain. Question
Question 1. [5 points] If the cross-price elasticity of demand between chocolates andicecreams is 0.5, then are chocolates and icecreams substitutes or complements? Explain.
Question 2. [5 points] Examine whether the following statement is true or false. Explain.
The income elasticity of demand is positive for a normal good.
Question 3. Examine whether each of the following statements is true or false. Explain.
a. [5 points] Average variable cost rises as output rises if marginal cost exceeds average total cost.
b. [5 points] Average total cost falls as output rises if marginal cost is less than average variable cost.
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