Question

If the cross elasticity of demand between tablets and smart phones is 2,0, this implies that these goods are:
a) Luxuries.
b) Complements.
c) Necessities.
d) Substitutes.

Answer 1

If the cross elasticity of demand between tablets and smart phones is 2,0, this implies that these goods are substitutes, because the cross elasticity is positive.
So, the correct answer is
d) Substitutes.