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Theory of Demand

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Multiple Choice

Which of the following is incorrect?

  1. The cross elasticity of demand for two substitute is positive.
  2. The income elasticity of demand is the percentage change in quantity demanded of a good due to a change in the price of a substitute.
  3. The cross elasticity of demand for two complements is negative.
  4. The price elasticity of demand is always negative, except for Giffen goods.
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