An antitrust agency is identifying the product market for Good X and determines that Good X and Good Y have a cross-price elasticity of 18.6. As a result of the cross-price elasticity, the antitrust agency is likely to ________ Good Y from Good X's product market as the products ________ compete as close substitutes.
A) include; do not
B) exclude; do
C) exclude; do not
D) include; do
D) include; do
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Figure 11-1
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In Figure 11-1, a technological breakdown in calculator production would cause which movement?
A. B to E B. B to C C. B to D D. A to D
Suppose that good X is a luxury and that good Y is a necessity. Which good would you expect to have more price elastic demand?
As inflation rates increase, borrowing and lending contracts tend to
A. increase in size. B. decrease in size. C. decrease in length of time. D. increase in length of time.
In a market system, how are the price signals established?
A) Consumer advocacy groups establish fair prices for items, and most firms follow these pricing guidelines because they don't want to anger their consumers. B) Industry associations establish an acceptable price range for each commodity sold within the industry, and member firms are obligated to abide by association guidelines. C) The forces underlying supply and demand interact to determine a market clearing price. D) Federal legislation establishes maximum prices for most goods, and state governments regulate the prices of any remaining items.