The cross-price elasticity of demand between good X and good Y is 0.5. Given this information, which of the following statements is true?
A. Goods X and Y are substitutes.
B. Goods X and Y are complements.
C. The demand for goods X and Y is income inelastic.
D. The demand for goods X and Y is inelastic.
Answer: A
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Since it is always a negative number, economists use the convention of taking the absolute value of
a. income elasticity of demand b. cross price elasticity of demand c. price elasticity of supply d. price elasticity of demand e. any elasticity calculation
The dean of a large university issues the following policy for faculty pay-raises in the smaller satellite campuses: faculty pay increases will be possible only if enrollment increases above last year's targets. Evaluate the impact of this policy on the overall system.
What will be an ideal response?
Hector puts $150 into an account when the interest rate is 4 percent. Later he checks his balance and finds he has about $168.73 . How long did Hector wait to check his balance?
a. 3 years b. 3.5 years c. 4 years d. 4.5 years
Refer to the accompanying figure. For Chris, the opportunity cost of planting one bulb is removing:
A. 1/3 of a bag of trash. B. 1/25 of a bag of trash. C. 3 bags of trash. D. 25 bags of trash.