If the cross price elasticity of demand between goods A and B was equal to 0.5, those goods are substitutes
a. True
b. False
Indicate whether the statement is true or false
True
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Suppose that the government passes a law requiring households to increase savings 10% above previous levels. According to Solow's growth theory, in the short run
A) output per capita grows more rapidly. B) output per capita grows at the constant steady state rate, n. C) output per capita stays constant. D) None of the above.
Direct controls are considered inefficient because all firms are forced to pay the same costs.
Answer the following statement true (T) or false (F)
Suppose that an economics professor selects two students, Audrey and Michael, to participate in a classroom experiment. The professor gives Audrey twenty $1 bills. Audrey must pick an allocation of the twenty $1 bills to offer to Michael. If Michael accepts the allocation, each student keeps his or her portion of the money. If Michael rejects the allocation, the professor keeps the $20, and each
student receives nothing. Audrey selects $19 for herself and $1 for Michael. Based on the studies of human decision making, which of the following statements is correct? a. If Michael accepts the offer, he is behaving rationally. b. If Michael rejects the offer, he may value fairness more than $1. c. If Michael rejects the offer, Audrey made a bad choice by trying to keep $19 for herself. d. Any of the above could be correct.
The market system is said to be characterized by "consumer sovereignty." This is because:
A. a large number of consumer goods are produced. B. consumer goods are more profitable than investment goods. C. the prices of consumer goods are regulated by government. D. of the major role of consumers in determining what goods are produced.