We would expect the cross-price elasticity of demand between dress shirts and ties to be ________, indicating that they are ________
A. positive; secondary goods.
B. negative; complements.
C. negative; substitutes.
D. positive; complements.
Answer: B
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For a risk averse person, an increase in wealth brings ________ total utility of wealth and ________ marginal utility of wealth
A) higher; higher B) higher; lower C) lower; higher D) lower; lower
According to estimates of the Taylor rule, monetary policy was too tight
A) from 1960 to 1965. B) from 1965 to 1979. C) in the 1980s. D) in the 1990s.
In the presence of a negative externality, a specific tax can achieve the social optimum because
A) output is reduced to zero as a result. B) it internalizes the external cost. C) it directly charges the producer for polluting. D) the price of the good rises by the full amount of the tax.
Suppose the supply of dollars decreased from S2 to S1 in Figure 36.3. As a result of this change,
A. A trade deficit will be created in Switzerland. B. Swiss chocolate imports to the United States will be lower-priced in dollars. C. The Swiss franc will gain value worldwide. D. U.S. computer exports to Switzerland will be lower-priced in dollars.