In order to prove that Dr. Pepper and 7-Up are substitutes, economists should test the ____ and get a ____.
A. price elasticity of demand; number less than 1
B. income elasticity; positive number
C. cross-price elasticity; positive number
D. price elasticity of demand; number greater than 1
Answer: C
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A free rider problem is created by private goods
Indicate whether the statement is true or false
Suppose that the consumer price index of a country was 160 at year-end 2007 and 168 at the end of 2008 . What was the country's inflation rate during 2008?
a. 5 percent b. 8 percent c. 60 percent d. 68 percent
In some industries, like insurance, both small and very large firms coexist and compete quite effectively in the market. This indicates that the long-run average total cost curve in these industries
a. is "U" shaped. b. is downward sloping over all levels of output. c. exhibits constant returns to scale over a wide range of output. d. exhibits diseconomies of scale beginning at a low rate of output.
The real value of money:
A. is another word for the face value. B. reflects the purchasing power of money. C. matters less to people than its nominal value. D. is the same as its nominal value.