The cross price elasticity of demand helps determine, empirically, whether a good is
A. normal or inferior.
B. unit elastic or perfectly inelastic in its own demand.
C. a necessity or a luxury.
D. a complement or a substitute to another good.
Answer: D
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If the inverse demand curve a monopoly faces is p = 100 - 2Q, and MC is constant at 16, then maximum profit
A) equals $336. B) equals $882. C) equals $1,218. D) cannot be determined solely from the information provided.
In determining the optimal capital budget, one should choose those project's whose ____ exceeds the firm's ____ cost of capital
a. internal rate of return, average b. internal rate of return, marginal c. internal rate of return, historic d. average rate of return, marginal e. none of the above
Which of the following statements is true?
A) when bond prices rise, real GDP and the price level rise. B) when bond prices fall, real GDP rises and the price level falls. C) when bond prices rise, the interest rate rises, and aggregate demand and the price level fall. D) when bond prices fall, the interest rate and aggregate demand fall.
When a country engages in international specialization, it focuses on producing which of the following?
A) goods with the highest opportunity cost. B) goods with the lowest opportunity costs. C) goods for which production takes fewer worker-hour than another country. D) goods for which production costs are more than average total costs.