If a 10 percent increase in the price of product A brings about a 3 percent increase in the sales of product B, then:
A. products A and B are complementary.
B. the cross elasticity of demand between these two products is positive.
C. products A and B are substitutes.
D. the demand for these products is inelastic.
Answer: C
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Credit card balances are not considered to be money primarily because they
A. are not part of people's wealth. B. are an asset used in making transactions. C. are rarely used to make purchases. D. do not represent an obligation to pay someone else.
Refer to Table 3-3. The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi) and the rest of the market. At a price of $6, the quantity demanded in the market would be
A) 36 lbs. B) 68 lbs. C) 89 lbs. D) 123 lbs.
How many of the following business cycle facts can be explained if the primary cause of business cycles is temporary changes in total factor productivity: procyclical consumption, procyclical investment, procyclical employment, and procyclical real
wages? A) one B) two C) three D) four
Very few players are drafted into the NFL when they play at Division II or Division III schools whereas more players are drafted in the MLB from these schools. What can explain this?
A) Attending a Division II or Division III school sends a stronger signal of future and present quality in the NFL. B) Attending a Division II or Division III school sends a weaker signal of future and present quality in the MLB. C) A signal of future and present quality is more important in the MLB than in the NFL. D) Attending a particular school is like a screening test for life insurance.