Suppose that the quantity of apples sold increases by 30 percent after the price of pears increases by 15 percent. What is the coefficient of cross elasticity of demand?
a. 3.0
b. 1.5
c. 0.2
d. 2.0
e. 0.3
D
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The standard of living rises at a faster pace than labor productivity if
A) n = q. B) n < q. C) n > q. D) The standard of living is not affected by the relative size of n and q.
Some economists have argued that certain characteristics of the delivery of health care justify government intervention. One of these characteristics is
A) health care is nonrivalrous and nonexcludable. B) health care generates negative externalities. C) health care is a public good. D) health care generates positive externalities.
Some factors that allow firms to make economic profits are beyond its control. All but one of the following is an uncontrollable factor. Which factor is controllable?
A) chance events B) consumer tastes C) product differentiation D) input prices
Describe an arms race in economic terms. Is it rational for countries to participate in an arms race?
What will be an ideal response?