Assume the demand function for good X can be written as Qd = 80 - 3Px - 6Py + 10I, where Px = the price of X, Py is the price of Y and I is consumer income
If the price of Y decreases by 5 dollars, what would the reduction in Px have to be in order to keep the quantity demanded of X unchanged by the change in the price of Y? A) decreased by 10 dollars
B) decreased by 5 dollars
C) decreased by 2.5 dollars
D) decreased by 1 dollar
A
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In the federal funds market diagram, a decrease in the required reserve ratio
A) shifts the demand curve for reserves to the left. B) increases the federal funds rate. C) results in a multiple expansion of deposits, which increases the equilibrium level of reserves held by banks. D) shifts the supply curve for reserves to the right.
If the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to:
a. rise and the equilibrium quantity to fall. b. rise and the equilibrium quantity to stay the same. c. rise and the equilibrium quantity to rise. d. stay the same and the equilibrium quantity to fall.
A decrease in the marginal factor cost of labor will
A) lead to an decrease in the quantity demanded of labor. B) induce a firm to hire fewer workers. C) induce a firm to hire more workers. D) cause the value of the marginal product of labor to decrease.
A firm's ________ is measured as a stock while ________ is measured as a flow.
A. investment in new capital; capital B. current labor force; current inventory C. capital; investment in new capital D. planned inventory; current inventory