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Answer:
C. Negative; Positive
Explanation:
If soda and sandwiches are complementary goods, then the cross price elasticity between them is negative. Negative cross price elasticity indicates that an increase in the price of soda would result in a fall in the quantity demand for sandwiches. On the other hand, a decrease in the price of soda would result in an increase in the quantity demanded for sandwiches.
If yogurt and sandwiches are substitute goods which means that yogart can be used in place of sandwiches or sandwiches can be used in place of yogurt. The cross price elasticity between the substitute goods is positive. Positive cross price elasticity indicates that an increase in the price of yogurt would result in an increase in the quantity demanded for sandwiches. On the other hand, a decrease in the price of yogurt would result in a fall in the quantity demanded for sandwiches.
Answer:
Correct option is (c)
Explanation:
Face value of bond is $1,000. If investors feel that bond issued by Springfield is less attractive than other bonds, this means either the bond is offering a coupon rate lower than market interest rate prevailing in the market as compared to other bonds.
In this case, bond will be sold at a price lower than its face value. This is also called discount bonds. Price of the bond falls as investors feel they can buy a similar bond that offers better returns.
Out of all options, $875 is lower than face value of $1,000, so, bond would be most likely sold at $875.
Where’s the other answer choices?
