If the cross-price elasticity of demand between blueberries and yogurt is negative, then the two goods are:
A. substitutes.
B. complements.
C. normal goods.
D. inferior goods.
Answer: B
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Refer to Figure 10-2. Which of the following statements is true?
A) Points a and b may not necessarily be the utility-maximizing quantities of ice cream cones at two different prices because we have no information on the consumer's budget or the price of other goods. B) Points a and b are derived independently of the utility-maximizing model. C) Points a and b are the utility-maximizing quantities of ice cream cones at two different prices of ice cream. D) Point a could be a utility-maximizing choice if the price is $3 but point b may not be because we have no information on the marginal utility per dollar when price changes.
Which of the following is a major implication of the invisible hand concept?
a. Government-operated firms tend to have lower costs than private sector firms. b. When directed by competitive market prices, the actions of self-interested individuals will tend to promote overall economic prosperity. c. Prosperity cannot be achieved unless the selfish nature of people can be changed. d. Competition is harmful to the health of an economy because it results in wasteful duplication.
If the GDP gap is -$3.5 trillion, then
A. workers are employed overtime. B. the economy is experiencing a boom. C. the economy is in a recession. D. cyclical unemployment is negative.
Refer to the scenario above. The net present value of buying the warranty is:
A) $99.02. B) $278. C) $135.65. D) $85.