If an increase in the price of good X results in a decrease in the quantity of Y demanded,
A. good X and good Y are substitutes.
B. good X and good Y are complements.
C. the cross-price elasticity of demand for good Y is positive.
D. There is not sufficient information to determine the relationship between good X and good Y.
Answer: B
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Which of the following is true?
A) The supply of credit and labor demand are positively correlated. B) The supply of credit and the quantity of real output are unrelated. C) The supply of credit and the quantity of real output are positively correlated. D) The supply of credit and labor demand are negatively correlated.
Assume that currently one U.S. dollar will purchase £0.65. Investors believe that one year from now a U.S. dollar will purchase £0.72. If we consider the U.S. dollar-pound market, where the horizontal axis measure the quantity of pounds, explain what we are likely to see in terms of demand and supply and the exchange rate.
What will be an ideal response?
Firms 1 and 2 compete in a Cournot duopoly. If firm 2 adopts a strategy that raises firm 1's marginal cost:
A. firm 2 will enjoy lower profits. B. firm 1 will increase its output. C. firm 2 will gain market share. D. All of the statements associated with this question are correct.
A characteristic of a public good is that a public good is provided
A. to some businesses, but not to others. B. only in some states. C. to many individuals at no additional cost. D. to low income residents in some states.