The cross elasticity between two goods has been measured at ?1.2. How are the goods related? Explain. Give an example of goods for which this might be a reasonable measure of cross elasticity.
What will be an ideal response?
The goods are complements. An increase in the use of one decreases the use of both. A decrease in the price of one increases the quantity demanded of one and the demand for the other. Examples include hamburgers and buns, cameras and film, cars and gasoline, and so on.
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In the above figure, suppose that the government sets a limit that may be produced of 10 units of output and the price rises to $4. In comparison to a competitive market the producer surplus would rise by
A) $0. B) $5. C) $15. D) $20.
Refer to Table 1-2. What is Thuy Anh's marginal benefit if she decides to stay open for an extra three hours instead of two hours?
A) $0 B) $20 C) $25 D) $45 E) $70
Refer to Table 4-11. The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick. The equilibrium price and quantity for Chef Ernie's sushi are $60 and 20 thousand units. What is the value of producer surplus?
A) $100 thousand B) $200 thousand C) $600 thousand D) $800 thousand
Refer to above figure. In the absence of trade, what is the country's consumer surplus?
What will be an ideal response?