The cross-price elasticity between good X and good Y is positive. Other things being equal, if the price of X rises:
A. quantity of Y demanded decreases.
B. quantity of Y demanded increases.
C. a consumer spends more on good Y than on good X.
D. a consumer spends more on good X than on good Y.
Answer: B
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The principles of comparative advantage and specialization only apply to trade between different nations
Indicate whether the statement is true or false
What criticism does the textbook level against the cost-plus-markup theory of price setting?
A) The theory does not agree with what businessmen say about price setting. B) The theory does not account for vastly different percentage markups on different products. C) The theory implies firms will sometimes want to set prices below average cost per unit. D) The theory ignores sunk costs. E) All of the above.
Of the following high-income countries, which has the highest number of CT scanners per 1 million population?
A) Canada B) Japan C) the United Kingdom D) the United States
In perfectly competitive markets, transactions costs are:
A. generally quite high. B. seen as a nuisance and generally ignored when making a transaction. C. low or nearly zero. D. a natural byproduct of making the transaction.