Question

Choose the best word to complete the sentence: During the height of the second wave of Covid-19, there was a pronounced increase in the demand for ginger tea and lemons. From this we can deduce that the two items have a _______ cross elasticity.

a. vast
b. positive
c. narrow
d. negative
e. cursory

Answer 1

The best word to complete the sentence is positive. This indicates that ginger tea and lemons have a positive cross elasticity, meaning they are substitute goods.

Step-by-step explanation:

The best word to complete the sentence is positive. From the given information, we can deduce that there was a pronounced increase in the demand for ginger tea and lemons during the height of the second wave of Covid-19. This indicates that the two items have a positive cross elasticity, meaning that they are substitute goods. When the price of one good (lemons) increases, the quantity demanded for the other good (ginger tea) also increases.