1. When figuring the cross elasticity of demand coefficient, you:

A) DO use negative numbers.
B) use the absolute value for the numbers plugged into the equation.
C) do NOT use negative numbers for the numbers plugged into the equation.
D) know if EDc < 0, then the two goods are complements.
E) know answers A) and D) are both correct.

2. Which of the following statements below are true?

I. If Edc > 0 the two goods are substitutes
II. If Edc > 0 the two goods are complements
III. If Edc < 0 the two goods are substitutes
IV. If Edc < 0 the two goods are complements
V. If Edc is positive the two goods are complements
VI. If Edc is negative the two goods are substitutes

A) I. and IV. only.
B) II., III., and V.
C) II., III., and VI.
D) I., III., and V.
E) I., III., and VI.

3. The simplified formula for income elasticity of demand is:

A) Qd of B divided by the change in Qd of B times the P of A divided by the change in the P of A.
B) Qd of B divided by the change in Qd of B times the change in the P of A divided by the P of A.
C) The change in Qd of B divided by Qd of B times the change in P of A divided by the P of A.
D) The change in Qd of B divided by Qd of B times the P of A divided by the change in the P of A.
E) The change in Qd of B divided by P of A times the Qd of B times the change in the P of A.