When the price of going to a movie rises 5 percent, the quantity of DVDs demanded increases 10 percent. The cross elasticity of demand equals
A) 10.0.
B) 0.50.
C) -0.50.
D) -2.0.
E) 2.0.
E
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Which of the following causes a decrease in demand for a normal good?
A) increase in price of a substitute B) increase in price of a complement C) increase in price D) increase in income
A monopolist faces a demand curve that
A) is perfectly horizontal at the market price. B) is below the marginal revenue curve. C) is downward sloping. D) coincides with the industry supply.
At any given airport, the airlines hold long-term leases for passenger loading gates. New gates cannot be added without approval of the airlines. Frequent flier programs are also common in the industry. It is, therefore, more difficult for a new airline to enter a given airport (market). Such factors: (i) are called barriers to entry. (ii) tend to decrease the contestability of the air travel
market. a. i and ii b. i not ii c. ii not i d. neither i nor ii
Holding other factors constant, if terrorist attacks increase the desire for precautionary saving, then the real interest rate will ________ and the equilibrium quantity of saving and investment will ________.
A. decrease; decrease B. decrease; increase C. increase; increase D. increase; decrease