Suppose the demand for good X is given by Qdx = 10 + axPx + ayPy + aMM. If ay is positive, then:
A. goods y and x are complements.
B. goods y and x are normal goods.
C. goods y and x are substitutes.
D. goods y and x are inferior goods.
Answer: C
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A cross-section graph
A) is divided into different sections. B) shows values of an economic variable for different groups in a population at a point in time. C) measures time on the x-axis and the variable in which we are interested on the y-axis. D) Both answers A and C are correct. E) Both answers B and C are correct.
Discuss some of the reasons behind downward stickiness of wages and prices
Use the following graph to answer the next question.
Assume the economy is initially located on AD0 and AS0. An increase in resource prices would result in price ________ and real domestic output ________.
A. F; A B. F; C C. G; B D. E; B
If a theatre company expects $250,000 in ticket revenue from five performances and $288,000 in ticket revenue if it adds a sixth performance, the
A) marginal revenue of the sixth performance is $288,000. B) marginal revenue of the sixth performance is $38,000. C) cost of staging the sixth performance is probably higher than the cost of staging the previous five. D) company will be making a loss on the sixth performance because its ticket sales will be less than the average revenue received from the previous five.