The cross-price elasticity of demand between rifles and bullets is likely to be
a. negative because the goods are complements
b. positive because the goods are complements
c. negative because the goods are substitutes
d. positive because the goods are substitutes
e. 0 because the goods are not substitutes
A
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If people assume that future rates of inflation will follow the pattern of inflation rates in the past, they are said to have
A) rational expectations. B) accommodative expectations. C) unstable expectations. D) adaptive expectations.
Which of the following is NOT a discount bond?
A) a U.S. savings bond B) a U.S. Treasury bill C) a U.S. Treasury note D) a zero-coupon bond
Answer the following statements true (T) or false (F)
1. Derived demand for a resource stems from the demand for the good or service it produces. 2. The MRP is the additional revenue obtained by producing one more unit of output. 3. In perfect product competition, the output price is fixed to the firm. 4. MRP declines because MP declines. 5. Firms hire workers up to the point where MRP = the wage rate.
Which of the following formulas is correct? Percentage change in:
A. price level approximates percentage change in real income minus percentage change in nominal income. B. real income approximates percentage change in nominal income minus percentage change in price level. C. nominal income approximates percentage change in price level minus percentage change in real income. D. real income approximates percentage change in price level minus percentage change in nominal income.