In September 2006, the Food and Drug Administration recommended that Americans avoid eating bagged raw spinach in the wake of an outbreak of E. coli bacteria.
Following this recommendation, the food industry looked at alternatives and many turned to arugula. One Chicago distributor claimed, The sale of the stuff has gone through the roof. Based on this information
A) the cross-price elasticity between arugula and spinach is negative.
B) the cross-price elasticity between arugula and spinach is positive.
C) the price elasticity of arugula is positive while the price elasticity of spinach falls to zero.
D) arugula is a normal good while raw spinach is an inferior good.
Question 2
Corporate managers and shareholders always have the same goals.
Indicate whether the statement is true or false
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