The cross price elasticity of demand is measured by the
A) percentage change in the quantity demanded of one good divided by the percentage change in quantity demanded of another good.
B) percentage change in the price of one good divided by the percentage change in price of another good.
C) percentage change in the demand for one good divided by the percentage change in price of another good.
D) percentage change in the price of one good divided by the percentage change in the demand for another good.
Answer: C
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If a firm competing in a price-taker market seeks to maximize profit, the firm should
a. increase output whenever marginal cost is less than average total cost. b. increase output whenever marginal revenue is less than marginal cost. c. choose the output where per-unit profit is greatest. d. increase output whenever price exceeds marginal cost.
Banks would be expected to:
A. minimize holding excess reserves because the practice of holding more than the required reserves is illegal. B. minimize holding excess reserves because the practice of holding more than the required reserves is not profitable. C. maximize holding excess reserves because the practice of holding more than the required reserves increases the assets of the bank. D. maximize holding excess reserves because the practice of holding more than the required reserves reduces the tax paid by the bank to the Federal Reserve.
OutputMarginal RevenueMarginal Cost0----1$16$142169316154162151628Refer to the above data. This firm is selling its output in a(n):
A. purely competitive market. B. oligopolistic market. C. monopolistic market. D. monopolistically competitive market.
In a market system, the "What will be produced?" question is ultimately decided by
What will be an ideal response?