If the cross-price elasticity of demand for SUVs with respect to the price of gasoline is -0.10, and gasoline prices rise by 18 percent, then SUV sales should, ceteris paribus,
A. Rise by 1.8 percent.
B. Fall by 18 percent.
C. Rise by 18 percent.
D. Fall by 1.8 percent.
Answer: D
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A. shows the relationship between the market price and the quantity demanded by consumers at each price. B. shows the relationship between a firm's output and the market price given the prices charged by the firm's rivals. C. shows the relationship between a firm's output and the market price given the outputs of the firm's rivals. D. shows the remaining demand for a good after a firm's rivals have sold their output.
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A) sales; higher B) sales; lower C) purchases; higher D) purchases; lower
In 1973, 1979 and 2007, the U.S. economy was hit by ________
A) the collapse of the financial sector B) the assassination of a Federal Reserve Board member C) three major aggregate supply shocks D) the after-effects of the process of creative destruction
A firm might offer efficiency wages to reduce worker turnover and thereby reduce production costs
a. True b. False Indicate whether the statement is true or false