For complements, cross price elasticity of demand is:
a. Negative
b. Positive
c. between zero and one only
d. zero.
a
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The most important economic benefit from specialization is that it
A) makes it possible for an economy to begin using money. B) leads to an increase in the standard of living in an economy. C) makes barter possible. D) eliminates the need for financial markets.
Which, if any, of the present values below are computed correctly?
a. A payment of $100 to be received one year from today, with a 2 percent interest rate, has a present value of $98.81. b. A payment of $200 to be received two years from today, with a 3 percent interest rate, has a present value of $188.52. c. A payment of $300 to be received three years from today, with a 4 percent interest rate, has a present value of $234.34. d. None of the above are correct to the nearest cent.
Why is the PPF bowed out in the HeckscherOhlin model?
A. Capital is specific to the production of one good. B. Labor is specific to the production of the other good. C. There are increasing opportunity costs of producing each good. D. Labor is not perfectly mobile between the production of the two goods.
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y1. C. P3 and Y1. D. P3 and Y2.