The cross-price elasticity of demand between good X and good Y is 0.5. Given this information, which of the following statements is true?
A. The demand for goods X and Y is inelastic.
B. The demand for goods X and Y is income inelastic.
C. Goods X and Y are complements.
D. Goods X and Y are substitutes.
Answer: D
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Which of the following would increase the natural rate of unemployment?
A) an increase in the number of younger, less skilled workers in the economy B) a reduction in the generosity of unemployment insurance programs C) an increase in government-sponsored programs that train unemployed workers so they can find new jobs quickly D) restrictions on the ability of unions to negotiate wage changes with companies
The long-run average cost curve shows
A) the average cost of producing where diminishing returns are not present. B) the plant size or scale that the firm should build. C) the lowest average cost of producing every level of output in the long run. D) where the most profitable level of output occurs.
If income decreases, there will be a parallel inward shift of the budget line
a. True b. False
Which statement is correct?
A. The operation of a market system eventually results in an equal distribution of income. B. Freedom of choice and enterprise are essential elements of the market system. C. Producers are "kings" in a market economy because they determine what is produced. D. The market system is efficient at allocation of resources but not in getting consumer goods to their most valued uses.