Question

question 8 (figure: supply curves) examine the figure supply curves. which graph shows a perfectly inelastic supply curve? a. a b. b c. c d. d question 9 suppose the cross - price elasticity of demand for butter and margarine is equal to 0.96 but the cross price elasticity for water and lemons is - 0.13. this means that butter and margarine are __ whereas water and lemons are __. a. substitutes; complements b. inelastic goods; elastic goods c. complements; substitutes d. inelastic goods; elastic goods

Explanation:

Question 8

A perfectly inelastic supply curve is vertical. It means that the quantity supplied does not change regardless of the price. In the given graphs, graph A is a vertical line.

If the cross - price elasticity of demand is positive, the goods are substitutes. Since the cross - price elasticity of demand for butter and margarine is 0.96 (positive), they are substitutes. If the cross - price elasticity of demand is negative, the goods are complements. Since the cross - price elasticity of demand for water and lemons is - 0.13 (negative), they are complements.

Answer:

A. A

Question 9