If the quantity of glazed donuts demanded increases by 6% when the price of cinnamon rolls increases by 9%, the cross-price elasticity of demand between glazed donuts and cinnamon rolls is
A. -1.5.
B. -0.33.
C. 0.67.
D. 1.5.
Answer: C
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Two donut chains in your town are battling for customers. The manager of the Real Yum Donut Shop lowered donut prices. As a result, customers: a. increase the quantity demanded of Real Yum donuts
b. decrease the quantity demanded of Real Yum donuts. c. buy the same quantity of Real Yum donuts as before the price change. d. decrease their demand for Real Yum donuts.
Why does Philip Morris produce so many different kinds of cigarettes?
Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000 . How much would a family that earned $20,000 owe?
a. -$8,000 b. -$2,400 c. $0 d. $2,400
The law of increasing costs means that when an economy increases the production of one item:
a) the opportunity cost goes up b) the actual cost of making the item goes down c) the actual cost goes up but the opportunity cost goes down d) the production costs will increase alot