If the cross elasticity of demand between good A and good B is negative, then a decrease in the price of good A results in
A) an increase in the demand for good B.
B) a decrease in the demand for good B.
C) a movement downward along the demand curve for good B.
D) an increase in the supply of good B.
E) a decrease in the supply of good B.
A
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Pizza is a normal good. In the above figure, the shift in the demand curve from D to D2 can be the result of
A) a decrease in the price of soda, a complement to pizza. B) an increase in the price of hamburgers, a substitute for pizza. C) a decrease in income. D) a study that shows that pizza is a very healthy food. E) an increase in the cost of producing pizza.
Firms pay famous individuals to endorse their products because
A) famous people only consume high-quality products. B) apparently demand is affected not just by the number of people who use a product but also by the type of person that uses the product. C) famous people obviously know what are the best goods and services. D) the firms are irrational and are wasting advertising expenditures.
Other things the same, an increase in the foreign price level
a. reduces the real exchange rate. This reduction could be offset by a decrease in the domestic price level. b. reduces the real exchange rate. This reduction could be offset by an increase in the domestic price level. c. increases the real exchange rate. This increase could be offset by a decrease in the domestic price level. d. increases the real exchange rate. This increase could be offset by an increase in the domestic price level.
Suppose total deposits in the First Bank of Commerce are $200,000 and required reserves are $10,000. Based on this information, the required reserve ratio is:
A. 20.0. B. 0.05. C. 0.10. D. 0.20.