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rise.","correct":true,"explanation":"Close substitutes give buyers realistic alternatives, so a price increase causes a relatively large fall in quantity demanded as consumers switch to another product."},{"text":"More inelastic - buyers can switch to alternatives after a price rise.","correct":false,"explanation":"The direction is reversed: plentiful substitutes make switching easier, increasing the response of quantity demanded to price. Therefore, demand becomes more elastic after a price rise."},{"text":"More elastic - buyers must keep purchasing the product after a price rise.","correct":false,"explanation":"Being unable or unwilling to switch reduces the response of quantity demanded, which describes inelastic demand. Close substitutes instead allow buyers to move away after a price rise."},{"text":"Unit elastic - buyers switch to alternatives only when prices remain unchanged.","correct":false,"explanation":"Close substitutes do not imply that spending changes proportionately or that switching requires unchanged prices. They make demand more elastic because buyers can respond directly to a price rise."}]},{"id":"0e40cc40-c63a-44e9-8ef9-8dd290a9838b","cardType":"basic","points":3,"front":"How does necessity or luxury status affect PED?","back":"

Necessities tend to have inelastic demand because buyers keep purchasing them.
Luxuries tend to have elastic demand because buyers can go without them.

","mcqOptions":[{"text":"

Necessities tend to have inelastic demand because buyers keep purchasing them.
Luxuries tend to have elastic demand because buyers can go without them.

","correct":true,"explanation":"Necessities are difficult to reduce when prices rise, whereas luxuries can be postponed or abandoned. This makes necessity demand relatively inelastic and luxury demand relatively elastic."},{"text":"

Necessities tend to have elastic demand because buyers can go without them.
Luxuries tend to have inelastic demand because buyers keep purchasing them.

","correct":false,"explanation":"The categories have been reversed. Consumers generally continue buying necessities despite price rises, while luxuries are easier to give up, so necessities are more inelastic and luxuries more elastic."},{"text":"

Necessities tend to have unit elastic demand because buyers switch to alternatives.
Luxuries tend to have unit elastic demand because buyers keep purchasing them.

","correct":false,"explanation":"Necessity and luxury status does not normally make both types unit elastic. Necessities are harder to reduce, while luxuries can be forgone, producing different elasticities."},{"text":"

Necessities tend to have elastic demand because buyers keep purchasing them.
Luxuries tend to have inelastic demand because buyers can go without them.

","correct":false,"explanation":"The explanations contradict the elasticity labels. Continuing to purchase despite a price rise indicates inelastic demand, while being able to go without a product indicates elastic demand."}]},{"id":"df0c9bee-d7aa-46db-a80f-e3a10602e280","cardType":"basic","points":2,"front":"Why does a good taking a large proportion of income tend to have more elastic demand?","back":"More elastic - a price rise takes a larger share of the consumer's budget.","mcqOptions":[{"text":"More elastic - a price rise takes a larger share of the consumer's budget.","correct":true,"explanation":"When a good uses a large share of income, a price rise has a substantial effect on real purchasing power. Consumers are therefore more likely to reduce quantity demanded."},{"text":"More inelastic - a price rise takes a larger share of the consumer's budget.","correct":false,"explanation":"A larger budget impact makes consumers more responsive, not less responsive, to price changes. The resulting adjustment in quantity demanded means demand is more elastic."},{"text":"More elastic - a price rise takes a smaller share of the consumer's budget.","correct":false,"explanation":"A small budget impact gives consumers less reason to alter their purchases, so demand tends to be more inelastic. A large income share has the opposite effect."},{"text":"Unit elastic - a price rise takes a larger share of the consumer's budget.","correct":false,"explanation":"A large budget share increases sensitivity to a price rise but does not guarantee a proportional quantity response. It generally makes demand more elastic rather than unit elastic."}]},{"id":"cbff6062-d1d1-4985-9ca7-5d71de0795f9","cardType":"basic","points":2,"front":"How do addiction, habit and branding affect PED?","back":"More inelastic - addiction, habit and brand loyalty make buyers reluctant to switch.","mcqOptions":[{"text":"More inelastic - addiction, habit and brand loyalty make buyers reluctant to switch.","correct":true,"explanation":"Addiction, established habits and brand loyalty reduce consumers' willingness to change products when prices rise. Quantity demanded therefore responds less strongly, making demand more inelastic."},{"text":"More elastic - addiction, habit and brand loyalty make buyers reluctant to switch.","correct":false,"explanation":"Reluctance to switch means consumers continue buying despite price changes, which is characteristic of inelastic demand. Elastic demand requires a relatively large response in quantity demanded."},{"text":"More inelastic - addiction, habit and brand loyalty make buyers eager to switch.","correct":false,"explanation":"Eagerness to switch would increase responsiveness to a price rise and make demand more elastic. Addiction, habit and loyalty instead discourage switching and reduce price sensitivity."},{"text":"Unit elastic - addiction, habit and brand loyalty make buyers reluctant to switch.","correct":false,"explanation":"Reluctance to switch does not imply that quantity changes in exact proportion to price. It reduces the response to price changes, so these factors tend to make demand more inelastic."}]},{"id":"e1e09d32-2c32-4a0b-9d9c-bbf6ec5752fc","cardType":"basic","points":2,"front":"Why does PED usually become more elastic over time?","back":"Demand becomes more elastic because buyers have more time to find and adopt alternatives.","mcqOptions":[{"text":"Demand becomes more elastic because buyers have more time to find and adopt alternatives.","correct":true,"explanation":"Over a longer period, consumers can search for substitutes, change routines and replace existing products. These additional adjustment opportunities increase the response of quantity demanded to price."},{"text":"Demand becomes more inelastic because buyers have more time to find and adopt alternatives.","correct":false,"explanation":"More time to find alternatives increases consumers' ability to respond to a price rise. That makes quantity demanded more responsive, so demand becomes more elastic rather than inelastic."},{"text":"Demand becomes more elastic because buyers have less time to find and adopt alternatives.","correct":false,"explanation":"Limited time restricts consumers' ability to change products or habits, reducing their response to price. This tends to make short-run demand more inelastic, not more elastic."},{"text":"Demand becomes unit elastic because buyers have more time to find and adopt alternatives.","correct":false,"explanation":"A longer adjustment period usually increases price responsiveness but does not ensure a proportional change in quantity demanded. The usual conclusion is greater elasticity, not unit elasticity."}]},{"id":"fd71e15f-ff18-4db4-9e57-e146cac270ee","cardType":"basic","points":2,"front":"Why is one brand of crisps more price-elastic than food in general?","back":"A narrowly defined good is usually more elastic because it has more substitutes than a broad category.","mcqOptions":[{"text":"A narrowly defined good is usually more elastic because it has more substitutes than a broad category.","correct":true,"explanation":"A specific brand has many close alternatives, including other crisp brands and flavours. Food as a broad category has fewer overall substitutes, so its demand is relatively less elastic."},{"text":"A broadly defined good is usually more elastic because it has more substitutes than a narrow category.","correct":false,"explanation":"Broad categories usually contain fewer substitutes outside the category, while a specific brand can be replaced by many similar products. Therefore, narrowly defined goods tend to be more elastic."},{"text":"A narrowly defined good is usually more inelastic because it has fewer substitutes than a broad category.","correct":false,"explanation":"The availability of alternatives is being reversed. Narrowly defined products normally have more close substitutes, making consumers more responsive to price changes and demand more elastic."},{"text":"A broadly defined good is usually more inelastic because it has more substitutes than a narrow category.","correct":false,"explanation":"Having more substitutes would increase elasticity, not reduce it. Broad categories generally have fewer substitutes outside their definition, whereas a single brand is easier to replace."}]},{"id":"e6eea0fc-8e5c-48e9-81fc-f464b8e05cb0","cardType":"basic","points":2,"front":"Which factor usually has the greatest influence on PED, and why?","back":"Availability of close substitutes is usually the strongest influence because it determines how easily buyers can escape a price rise.","mcqOptions":[{"text":"Availability of close substitutes is usually the strongest influence because it determines how easily buyers can escape a price rise.","correct":true,"explanation":"Close substitutes give consumers a practical route away from a product after its price rises. The easier that switching is, the larger the fall in quantity demanded."},{"text":"Availability of close substitutes is usually the weakest influence because it determines how easily buyers can escape a price rise.","correct":false,"explanation":"The ability to switch directly controls how strongly consumers react to a price rise. More accessible close substitutes therefore usually increase elasticity rather than weaken its influence."},{"text":"Consumer income is usually the strongest influence because it determines how easily buyers can escape a price rise.","correct":false,"explanation":"Income can affect affordability, but it does not directly provide an alternative product. Close substitutes determine whether consumers can switch away, making them the usual strongest influence on PED."},{"text":"Time period is usually the strongest influence because it determines how easily buyers can escape a price rise.","correct":false,"explanation":"Time affects how fully consumers can adjust, but the actual availability of alternatives is the more direct determinant. A long period cannot create easy switching where close substitutes do not exist."}]},{"id":"631bbbdb-0d1b-4500-9acb-44c5074c64be","cardType":"basic","points":2,"front":"What determines the sign of YED?","back":"Positive for normal goods and negative for inferior goods.","mcqOptions":[{"text":"Positive for normal goods and negative for inferior goods.","correct":true,"explanation":"Income elasticity compares the percentage change in demand with the percentage change in income. Normal goods have demand that rises with income, while inferior goods have demand that falls."},{"text":"Negative for normal goods and positive for inferior goods.","correct":false,"explanation":"The signs have been reversed. Demand for normal goods increases as income rises, giving a positive YED, whereas demand for inferior goods decreases, giving a negative YED."},{"text":"Positive for normal goods and positive for inferior goods.","correct":false,"explanation":"Inferior goods are defined by falling demand as income increases, so their income elasticity is negative. A positive sign indicates demand rises with income, as for normal goods."},{"text":"Negative for normal goods and negative for inferior goods.","correct":false,"explanation":"Normal and inferior goods respond in opposite directions to income changes. Normal goods have positive YED because demand rises with income; inferior goods have negative YED because demand falls."}]},{"id":"ea9f0d8f-0fb2-40dc-a36e-ab7a48cf2a6b","cardType":"basic","points":3,"front":"How does necessity or luxury status affect YED?","back":"

Necessities have a YED between 0 and 1.
Luxuries have a YED above 1.

","mcqOptions":[{"text":"

Necessities have a YED between 0 and 1.
Luxuries have a YED above 1.

","correct":true,"explanation":"Demand for necessities rises less than proportionately as income rises, giving YED between 0 and 1. Demand for luxuries rises more than proportionately, so their YED exceeds 1."},{"text":"

Necessities have a YED above 1.
Luxuries have a YED between 0 and 1.

","correct":false,"explanation":"This reverses the classifications. Necessities respond less than proportionately to income changes, giving YED between 0 and 1, while luxuries respond more than proportionately and have YED above 1."},{"text":"

Necessities have a YED below 0.
Luxuries have a YED between 0 and 1.

","correct":false,"explanation":"A negative YED identifies an inferior good, not a necessity as such. Necessities normally have YED between 0 and 1, whereas luxuries have YED above 1."},{"text":"

Necessities have a YED equal to 0.
Luxuries have a YED equal to 1.

","correct":false,"explanation":"Necessity and luxury status describe ranges rather than fixed YED values. Necessities have positive YED below 1, while luxuries have YED above 1 because demand rises more than proportionately."}]},{"id":"fa1ee865-90ad-4491-974a-cb4ff0ffbc91","cardType":"basic","points":2,"front":"Why can a good's YED change as average income increases?","back":"A good may change from a luxury into a necessity as average income rises.","mcqOptions":[{"text":"A good may change from a luxury into a necessity as average income rises.","correct":true,"explanation":"As average income rises, a previously exceptional purchase can become part of normal consumption. Its demand then responds less than proportionately to further income increases, changing its classification from luxury to necessity."},{"text":"A good may change from a necessity into a luxury as average income rises.","correct":false,"explanation":"This reverses the usual transition. Rising average income can make a previously unaffordable luxury part of routine consumption, so the good becomes a necessity and its YED typically falls."},{"text":"A good may change from a normal good into an inferior good as average income rises.","correct":false,"explanation":"This confuses income ranges with the usual luxury-to-necessity transition. As average income rises, routine consumption can reduce responsiveness to further income growth without necessarily making YED negative."},{"text":"A good may change from a substitute into a complement as average income rises.","correct":false,"explanation":"Substitute and complement relationships concern XED and interactions between two goods, not changing income responsiveness. Rising incomes may instead turn a luxury into a necessity as consumption becomes routine."}]},{"id":"3f9d397a-eb65-4228-bcef-1c5ba8fb9d6e","cardType":"basic","points":2,"front":"What makes positive XED between two substitutes larger?","back":"Larger positive XED - consumers can switch more easily between closer substitutes.","mcqOptions":[{"text":"Larger positive XED - consumers can switch more easily between closer substitutes.","correct":true,"explanation":"Closer substitutes allow consumers to respond strongly when one good’s price changes by switching to the other. The resulting larger change in quantity demanded produces a larger positive XED."},{"text":"Larger positive XED - consumers find it harder to switch between distant substitutes.","correct":false,"explanation":"Difficulty switching weakens the demand response and makes positive XED smaller, not larger. Positive XED is larger when substitutes are close and consumers can switch between them easily."},{"text":"Larger positive XED - consumers use the two goods together more frequently.","correct":false,"explanation":"Goods used together are complements and normally have negative XED. A larger positive XED instead indicates close substitutes between which consumers can switch easily after a relative price change."},{"text":"Larger positive XED - consumers view the two goods as increasingly unrelated.","correct":false,"explanation":"Unrelated goods have zero or near-zero XED because one price barely affects demand for the other. Larger positive XED occurs when consumers regard the goods as close substitutes."}]},{"id":"e2619715-0aa5-48aa-995d-e95cca5e730d","cardType":"basic","points":2,"front":"What makes negative XED between complements larger?","back":"Larger negative XED - the goods are used together more strongly.","mcqOptions":[{"text":"Larger negative XED - the goods are used together more strongly.","correct":true,"explanation":"Strongly complementary goods are commonly consumed together, so a price rise for one causes a relatively large fall in demand for the other. This produces a larger negative XED."},{"text":"Larger negative XED - the goods can replace each other more easily.","correct":false,"explanation":"Goods that easily replace each other are close substitutes and therefore have positive XED. A larger negative XED arises when the goods are strongly complementary and used together."},{"text":"Larger negative XED - the goods are used together less strongly.","correct":false,"explanation":"Weak complementarity makes demand for one good respond less to the other’s price, bringing XED closer to zero. Stronger joint use creates the larger negative XED."},{"text":"Larger negative XED - the goods are viewed as unrelated by consumers.","correct":false,"explanation":"Unrelated goods produce zero or near-zero XED because a price change for one does not affect demand for the other. Strong complements instead produce a larger negative XED."}]},{"id":"42c3829b-8bdd-4c57-821f-2dbd977950cb","cardType":"basic","points":1,"front":"What is the expected XED between unrelated goods?","back":"Zero or near zero, because consumers do not view the goods as related.","mcqOptions":[{"text":"Zero or near zero, because consumers do not view the goods as related.","correct":true,"explanation":"When goods are unrelated, a price change for one has little or no effect on demand for the other. Their cross elasticity of demand is therefore zero or close to zero."},{"text":"Large and positive, because consumers can easily switch between the goods.","correct":false,"explanation":"A large positive XED describes close substitutes, not unrelated goods. If consumers see no relationship between the goods, changing one price leaves demand for the other largely unchanged, giving near-zero XED."},{"text":"Large and negative, because consumers usually purchase the goods together.","correct":false,"explanation":"A large negative XED describes strong complements that are purchased together. Unrelated goods have no meaningful joint consumption relationship, so their expected XED is zero or near zero."},{"text":"Exactly equal to one, because demand changes in the same proportion as price.","correct":false,"explanation":"This confuses XED with unit elasticity and assumes a relationship between the goods. For unrelated goods, one good’s price does not materially affect demand for the other, so XED is near zero."}]},{"id":"7f19c115-9bc0-4c0e-a2ee-c1cbd1ea5870","cardType":"basic","points":2,"front":"Is a good's PED fixed?","back":"No. It changes with the time period and the breadth of the good's definition.","mcqOptions":[{"text":"No. It changes with the time period and the breadth of the good's definition.","correct":true,"explanation":"Consumers usually find more alternatives over longer periods, and narrowly defined goods tend to have more close substitutes. PED therefore varies with both time and how broadly the market is defined."},{"text":"Yes. It remains constant across time periods and definitions of the good.","correct":false,"explanation":"This treats PED as an unchanging product characteristic. Consumers can adjust more over time, while narrower definitions usually provide more substitutes, so both factors can change PED."},{"text":"No. It changes only with income and the prices of complementary goods.","correct":false,"explanation":"Income and related-good prices shift demand rather than determining whether demand is price elastic in this way. PED changes with factors including the adjustment period and breadth of the good’s definition."},{"text":"Yes. It is fixed once the current market price has been established.","correct":false,"explanation":"A market price does not permanently fix price responsiveness. PED may differ along a demand curve and also changes when consumers have more adjustment time or the good is defined differently."}]},{"id":"114219fe-c1dd-43ba-ae72-d2a736fdadb3","cardType":"basic","points":3,"front":"How can conflicting determinants affect the prediction of a good's PED?","back":"

Many substitutes and a large income share point towards elastic demand.
No close substitute and necessity status point towards inelastic demand.
The final outcome depends on the net effect for that good.

","mcqOptions":[{"text":"

Many substitutes and a large income share point towards elastic demand.
No close substitute and necessity status point towards inelastic demand.
The final outcome depends on the net effect for that good.

","correct":true,"explanation":"Several PED determinants can pull in opposing directions, so no single factor always decides elasticity. Their combined strength determines whether the good’s demand is elastic or inelastic overall."},{"text":"

Many substitutes and a large income share point towards inelastic demand.
No close substitute and necessity status point towards elastic demand.
The final outcome depends on the net effect for that good.

","correct":false,"explanation":"The first two relationships are reversed. Easy switching and a large budget impact increase price responsiveness, while necessity status and a lack of close substitutes reduce it; the net effect determines PED."},{"text":"

Many substitutes and a large income share point towards elastic demand.
No close substitute and necessity status point towards inelastic demand.
The final outcome depends on the strongest single factor for that good.

","correct":false,"explanation":"PED is not automatically determined by whichever factor appears strongest in isolation. Economists assess how all relevant determinants interact, so the final classification depends on their combined net effect."},{"text":"

Many substitutes and a large income share point towards unit elastic demand.
No close substitute and necessity status point towards perfectly inelastic demand.
The final outcome depends on the net effect for that good.

","correct":false,"explanation":"These determinants indicate general tendencies, not exact elasticity values. Substitutes and high income share point towards elastic demand, while necessity status and absent substitutes point towards inelastic demand; their net effect matters."}]},{"id":"ae932d69-3786-4834-9659-4df9752cfcee","cardType":"cloze","points":null,"front":"Many close substitutes make demand [ ] because buyers can switch away after a price rise.","back":"Many close substitutes make demand more elastic because buyers can switch away after a price rise.","mcqOptions":[{"text":"more elastic","correct":true,"explanation":"A price rise encourages buyers to switch to readily available alternatives, causing a relatively large fall in quantity demanded. Many close substitutes therefore make demand more price elastic."},{"text":"more inelastic","correct":false,"explanation":"This reverses the effect of substitute availability. Close alternatives make switching after a price rise easier, increasing the quantity response and making demand more elastic rather than more inelastic."},{"text":"perfectly inelastic","correct":false,"explanation":"Perfectly inelastic demand means quantity demanded never responds to price, which is especially implausible when close alternatives exist. Easy switching instead makes demand more elastic."},{"text":"unit elastic","correct":false,"explanation":"Having many close substitutes does not imply the exact PED value of one. It increases consumers’ ability to switch after a price rise, so demand becomes more elastic."}]},{"id":"21c1db0e-6ebe-4731-8073-0e13d8abcddf","cardType":"cloze","points":null,"front":"As the time period lengthens, demand usually becomes [ ].","back":"As the time period lengthens, demand usually becomes more elastic.","mcqOptions":[{"text":"more elastic","correct":true,"explanation":"With more time, consumers can find substitutes, change habits and adjust spending, so demand responds more strongly to a price change and becomes more elastic."},{"text":"less elastic","correct":false,"explanation":"This reverses the time-period effect: demand is usually less responsive immediately, but becomes more elastic as consumers gain time to adjust their choices."},{"text":"perfectly elastic","correct":false,"explanation":"More time increases responsiveness but does not normally make demand infinitely responsive. Perfect elasticity requires consumers to buy any quantity at one price and none at another."},{"text":"unit elastic","correct":false,"explanation":"Unit elasticity means the percentage change in quantity demanded equals the percentage change in price. Longer adjustment time usually increases responsiveness beyond the initial level, rather than fixing it at one."}]},{"id":"a89d3e32-ebc6-4695-bc4c-42b991fdb6f6","cardType":"cloze","points":null,"front":"YED is [ ] for normal goods and negative for inferior goods.","back":"YED is positive for normal goods and negative for inferior goods.","mcqOptions":[{"text":"positive","correct":true,"explanation":"Normal goods have positive YED because demand rises when consumer income rises, giving a positive relationship between income and quantity demanded."},{"text":"negative","correct":false,"explanation":"A negative YED indicates an inferior good, whose demand falls as income increases. Normal goods instead have positive YED because higher income raises their demand."},{"text":"zero","correct":false,"explanation":"Zero YED means demand is unaffected by income changes, which describes an income-inelastic good rather than the general relationship for normal goods."},{"text":"unitary","correct":false,"explanation":"Unitary YED means demand changes proportionately with income, but normal goods are defined by having a positive YED, which may be below, equal to or above one."}]},{"id":"e96d3b61-7678-46cb-b21a-6e890b96e9b9","cardType":"cloze","points":null,"front":"YED is positive for normal goods and [ ] for inferior goods.","back":"YED is positive for normal goods and negative for inferior goods.","mcqOptions":[{"text":"negative","correct":true,"explanation":"Inferior goods have negative YED because consumers buy less of them when their income rises, often switching to higher-quality alternatives."},{"text":"positive","correct":false,"explanation":"Positive YED identifies normal goods, whose demand increases with income. Inferior goods have the opposite relationship, so their YED is negative."},{"text":"zero","correct":false,"explanation":"Zero YED means income changes do not affect demand. Inferior goods respond in the opposite direction to income, producing a negative rather than zero YED."},{"text":"unitary","correct":false,"explanation":"Unitary YED describes a proportional response to income and is positive. Inferior goods are identified by demand falling as income rises, giving negative YED."}]},{"id":"33200b8d-4e40-4ba5-adec-6e08fd938c81","cardType":"cloze","points":null,"front":"The YED of a necessity is usually between [ ], whereas the YED of a luxury is usually above 1.","back":"The YED of a necessity is usually between 0 and 1, whereas the YED of a luxury is usually above 1.","mcqOptions":[{"text":"0 and 1","correct":true,"explanation":"Necessities are normal goods, but demand for them rises less than proportionately when income increases. Therefore their YED is positive but below one, between 0 and 1."},{"text":"1 and 2","correct":false,"explanation":"A YED between 1 and 2 indicates an income-elastic normal good, more typical of a luxury. Necessity demand rises less than proportionately, so its YED lies between 0 and 1."},{"text":"-1 and 0","correct":false,"explanation":"A negative YED indicates an inferior good, not a necessity in the usual classification. Necessities generally have positive income responses below one."},{"text":"2 and 3","correct":false,"explanation":"Values between 2 and 3 show strongly income-elastic demand, associated with luxuries rather than necessities. Necessities usually have a positive YED below one."}]},{"id":"bee5bdc1-12c2-46dd-b693-5cd8f2fa9764","cardType":"cloze","points":null,"front":"The YED of a necessity is usually between 0 and 1, whereas the YED of a luxury is usually [ ].","back":"The YED of a necessity is usually between 0 and 1, whereas the YED of a luxury is usually above 1.","mcqOptions":[{"text":"above 1","correct":true,"explanation":"Luxury goods have income-elastic demand: a rise in income causes a more-than-proportionate rise in demand. This gives them a YED above 1."},{"text":"below 1","correct":false,"explanation":"A YED below one means demand changes less than proportionately with income, which is characteristic of necessities. Luxuries have more-than-proportionate income responses, so their YED is above one."},{"text":"equal to 1","correct":false,"explanation":"A YED equal to one means demand changes in exactly the same proportion as income. Luxury demand usually rises more than proportionately, producing a value above one."},{"text":"between 0 and 1","correct":false,"explanation":"A value between 0 and 1 describes a necessity, where demand rises less than proportionately with income. Luxury demand is income elastic and has a YED above one."}]},{"id":"0c0c9bc6-f419-414d-aa64-bfa2b1abac65","cardType":"cloze","points":null,"front":"Substitutes have a [ ] XED, whereas complements have a negative XED.","back":"Substitutes have a positive XED, whereas complements have a negative XED.","mcqOptions":[{"text":"positive","correct":true,"explanation":"Substitutes have positive XED because a price rise for one product increases demand for the other, creating a positive relationship between the two quantities demanded."},{"text":"negative","correct":false,"explanation":"Negative XED identifies complements: a price rise for one reduces demand for the other. Substitutes move in opposite directions in use but have positive cross-price elasticity."},{"text":"zero","correct":false,"explanation":"Zero XED means the goods are unrelated, so a price change in one has no effect on demand for the other. Substitutes have a positive relationship."},{"text":"unitary","correct":false,"explanation":"Unitary XED describes a proportional numerical response, not the defining sign of substitute relationships. Substitutes are identified by positive XED, while complements have negative XED."}]},{"id":"54f5d40f-ec6d-4cf9-823d-0b6f103d9fc8","cardType":"cloze","points":null,"front":"Substitutes have a positive XED, whereas complements have a [ ] XED.","back":"Substitutes have a positive XED, whereas complements have a negative XED.","mcqOptions":[{"text":"negative","correct":true,"explanation":"Complements are used together, so a price rise for one reduces demand for the other. This inverse relationship gives complements a negative XED."},{"text":"positive","correct":false,"explanation":"Positive XED applies to substitutes, where a price rise for one increases demand for the other. Complementary goods move together in demand and therefore have negative XED."},{"text":"zero","correct":false,"explanation":"Zero XED means the products are unrelated and a price change in one does not affect demand for the other. Complements have a negative relationship."},{"text":"unitary","correct":false,"explanation":"Unitary XED describes equal proportional changes, not whether goods are complements. Complementary products are identified by demand moving in opposite directions after a price change, giving negative XED."}]}]}],"examCountdown":null,"heading":"2.2.6 factors affecting elasticities of demand","title":"2.2.6 factors affecting elasticities of demand Flashcards","topbar":{"backHref":"/international-a-level/economics/cie/flashcards"},"topicSidebar":"$L38"}]}],"topicId":"0c4c6a7d-4424-4911-a7f6-4eed70d005ef","walled":"$L39"}],"$L3a","$L3b"]