In response to a price change for good Y, if the cross-elasticity of demand for good Y is negative, good X and good Y are substitutes
a. True
b. False
Indicate whether the statement is true or false
False
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If a larger fraction of the adult population is working in the marketplace, household production
A) counted in real GDP increases. B) not counted in real GDP increases. C) counted in real GDP decreases. D) not counted in real GDP decreases.
Assume that product X has a negative cross elasticity with respect to shoes. If the price of shoes rises
A) the demand for product X will decrease. B) the quantity demanded for product X will increase. C) the demand for shoes will fall. D) the demand for product X will increase.
The use of chlorofluorocarbons in refrigerators and air conditioners is alleged to cause the destruction of the ozone layer that surrounds the earth. This layer protects humans from ultraviolet radiation, which causes skin cancer. Industry has been prohibited from using these substances in aerosol cans, but the government has been reluctant to ban their use altogether because of the serious
economic consequences. Economists analyze such problems and refer to them as a. issues of unfairness. b. examples of excess abstraction. c. externalities. d. comparative advantage issues. e. examples of trade-offs between output and equality.
If a 10 percent rise in airfares leads to a 5 percent increase in total expenditures on air travel, the price elasticity of demand for air travel in this range must be
a. 2. b. elastic. c. 0.5. d. inelastic.