Suppose that when the price of root beer rises 10%, the quantity of hotdogs demanded falls 5%. This would mean that hotdogs and root beer are
A. substitutes, with a cross price elasticity of 0.5.
B. substitutes, with a cross price elasticity of -2.0.
C. complements, with a cross price elasticity of -0.5.
D. complements, with a cross price elasticity of -2.0.
Answer: C
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In the long run, firms in markets that are ________ earn zero economic profits
A) perfectly competitive B) monopolistically competitive C) monopolies D) Both A and B
Assume that Joe and Sarah, from the figure shown, are also dating, in addition to working together on the joint school project. Further assume that Joe is madly in love with Sarah, who is an excellent student. Sarah tells Joe that she will break up with him if he does not put forth high effort on this project. This future punishment by Sarah is an example of:
This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single grade. They both will enjoy a higher grade when more effort is put into the project, but they also get pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive.
A. a commitment strategy.
B. an effort optimization strategy.
C. an ultimatum.
D. a bargaining strategy.
Import standards on specific countries usually address issues affecting:
A. domestic consumers. B. domestic producers. C. foreign production practices. D. how goods and services flow from one nation to another.
Which of the following describes the effect on the domestic market of tariffs imposed on imported wool blankets?
a. Fewer wool blankets will be sold overall. b. Prices for domestic wool blankets will fall. c. Sales will fall for domestic wool producers. d. Imported wool blanket sales will increase.