The demand for good X is estimated to be Qxd = 10, 000 ? 4PX + 5PY + 2M + AX, where PX is the price of X, PY is the price of good Y, M is income, and AX is the amount of advertising on X. Suppose the present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units. Based on this information, the cross-price elasticity between goods X and Y is:
A. 0.008.
B. ?0.8.
C. ?0.08.
D. ?8.
Answer: A
You might also like to view...
The slope of a production possibilities frontier
A) is always varying. B) measures the opportunity cost of producing one more unit of a good. C) has no economic relevance or meaning. D) is always constant.
Refer to the information above. Net investment becomes more unstable if j ________ and v* ________
A) rises, rises B) rises, falls C) falls, rises D) falls, falls
Why is the Big Mac a good indicator of purchasing power parity?
What will be an ideal response?
Investment A pays $1,200 half of the time and $800 half of the time. Investment B pays $1,400 half of the time and $600 half of the time. Which of the following statements is correct?
A. Investment A and B have the same expected value, but A has greater risk. B. Investment A has a greater expected value than B, but B has less risk. C. Investment B has a higher expected value than A, but also greater risk. D. Investment A and B have the same expected value, but A has lower risk than B.