Answer the following statement(s) true (T) or false (F)
1. On average over all goods, it has been found that as people become wealthier, expenditures for higher quality grow more rapidly than expenditures for increased quantity.
2. The cross elasticity between California and Florida oranges is likely to be negative because they are substitutes for one another.
3. If the cross price elasticity of demand is negative, then the two goods under consideration must be complements.
4. If the cross-price elasticity for oranges with respect to apples is 1.2 and the price of apples increase by 5%, then we can expect the quantity demanded of oranges to decrease by 6%.
1. True
2. False
3. True
4. False
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Suppose a perfectly competitive firm's production function is q = L0.2K0.6 and it takes the wage and price as given. Then the firm's long-run demand for labor as a function of K, w, and p is
A) p5((0.2/w)2(0.6/r)3). B) p5((0.2/w)4(0.6/r)5). C) p5((0.2/w)5(0.6/r)4). D) p5((0.2/w)3(0.6/r)2).
Suppose Sprite and 7-Up are considered by consumers to be substitutes. The likely economic impact of a decrease in the price of 7-Up is a:
a. movement up along the demand curve for Sprite. b. decrease in the supply of 7-Up c. rightward shift of the demand curve for Sprite. d. leftward shift of the demand curve for Sprite.
Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward
A major feature of farm legislation beginning in 2015 includes
A) Set aside requirements to receive farm program benefits. B) Deficiency payments. C) Crop insurance. D) None of the above.