Suppose the cross-price elasticity of demand between hot dogs and mustard is -2.00 . This implies that a 20 percent increase in the price of hot dogs will cause the quantity of mustard purchased to
a. fall by 200 percent.
b. fall by 40 percent.
c. rise by 200 percent.
d. rise by 40 percent.
b
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You have just been named President and Chief Executive Officer at the StrideRite Shoe Corporation. This appointment places you in the role of ________ to lower managers and ________ to the stockholders
A) principal; principal B) principal; agent C) agent; principal D) agent; agent
A natural monopoly occurs when
A) one firm owns all the vital resources needed to produce a particular good. B) economies of scale allow one firm to supply the entire market at the lowest possible cost. C) a few firms collude to act as a single firm. D) one firm captures all the consumer surplus.
Which of the following is NOT an expected consequence of balancing the federal government's budget?
A) increased private investment B) increased borrowing from foreigners C) reduced interest payment to foreigners D) B and C.
Which of the following gives pollution-emitting firms an incentive to reduce the damage they do to the environment?
a. Negative externalities b. Positive externalities c. Commands and controls d. Pollution charges