Economics Multiple Choice Question – 3 July 2018

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Diagram 13

In the above figure, if the two goods, A and B, are complements, which of the following is true?

Select ONE answer:

  1. The cross elasticity of demand between them is positive.
  2. The shift from S0 to S1 for good A lead to the shift from D0 to D1 for good B.
  3. The shift from D0 to D1 for good B lead to a shift from S0 to S1 for good A.
  4. The law of demand is at work in both markets.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Economics KS5 classes.

The answer is 2

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