What would you expect the cross price elasticity of iPods and online music downloads? Explain your answer
What will be an ideal response?
The cross price elasticity of iPods and music downloads should be negative because they are likely to be complements. Thus, an increase in the price of iPods will decrease the demand for music downloads.
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An increase in the price level might cause:
A. a decrease in the quantity of aggregate demand because of the substitution effect. B. a decrease in the quantity of aggregate demand because of the interest rate effect. C. an increase in the quantity of aggregate demand because of the multiplier effect. D. an increase in the quantity of aggregate demand because of the money wealth effect.
An economy produces two goods, x and y. A year ago the price of x was $4 and the price of y was $6 . Today the price of x is $8 and the price of y is $10 . What happened to the nominal and the real value of good x? What happened to the nominal and real value of good y?
The unemployment rate is equal to the number of people who are unemployed divided by the number of people in the labor force.
Answer the following statement true (T) or false (F)
Refer to the above figure. Which panel represents the long-run situation for a monopolistically competitive firm?
A. Panel A B. Panel B C. Panel C D. Panel D