Demand and supply — true or false?

Exercise and reference answers

Questions

1. Statement is true

   Yes

   Statement

   An inferior good has a negative income elasticity of demand.

2. Statement is true

   Yes

   Statement

   Substitute goods have positive cross-price elasticity.

3. Statement is true

   No

   Statement

   Complementary goods have positive cross-price elasticity.

4. Statement is true

   Yes

   Statement

   A Giffen good violates the law of demand.