Compared to coffee, we would expect the cross elasticity of demand for:
A. tea to be negative, but positive for cream.
B. tea to be positive, but negative for cream.
C. both tea and cream to be negative.
D. both tea and cream to be positive.
Answer: B
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The greater the the number and closeness of substitutes available between monopolistically competitive firms
A) the greater the ability of a firm to raise its price above the price of close substitutes. B) the smaller the ability of a firm to raise its price above the price of close substitutes. C) the more inelastic the demand curve. D) the greater the positive economic profits for a single firm.
Most economists agree that the government should use incomes policies to control inflation during peacetime
a. True b. False Indicate whether the statement is true or false
A special interest issue is one that:
a. provides large private benefits and large social benefits b. provides small private benefits and large social benefits. c. provides large benefits to each of a small number of people and small costs to each of a large number of people. d. provides small benefits to each of a small number of people and large costs to each of a large number of people.
The equilibrium price of a good in market A is $24. The current price of the good in market A is $21. At this price, a(n) ________________________ of the good exists in market A
A) surplus B) shortage C) excess supply D) excess demand E) b and d