If the price of cereal increases by 10 percent and the amount of milk demanded decreases by 2 percent, then the cross-price elasticity of these goods is:
A. 5.
B. 5.
C. 0.2.
D. 0.2
D. 0.2
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Which of the following is a short-run decision for a muffin shop?
a. hire more workers b. add new ovens c. expand into the building next door d. open a second shop on the other side of town e. go out of business
When competition is present and private ownership rights are clearly defined and securely enforced,
a. production and trade are encouraged and plunder (taking from others) is discouraged. b. people get ahead by helping others in exchange for income. c. employers will have to provide prospective employees with at least as good a deal as they could get elsewhere. d. all of the above are correct.
According to new classical economists, policies should be introduced suddenly to surprise the economy in order to
A. Prevent political lobbying that results in goal conflicts. B. Minimize design problems that impede the implementation of policy. C. Avoid the lags associated with policy announcements. D. Prevent anticipatory behavior that defeats the purpose of the policy.
If inventories are being depleted, firms may respond by cutting prices.
Answer the following statement true (T) or false (F)