The cross-price elasticity of demand between good X and good Y is -0.8. Given this information, which of the following statements is true?
A. The demand for goods X and Y is income elastic.
B. Goods X and Y are complements.
C. The demand for goods X and Y is elastic.
D. Goods X and Y are substitutes.
Answer: B
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Use the following table for a certain product's market in Marketopia to answer the next question.Quantity Demanded DomesticallyPriceQuantity Supplied Domestically1,400$102,2001,60092,0001,80081,8002,00071,6002,20061,4002,40051,200Assume the small-country model is applicable. If the world price of the product is $6 and an import quota of 400 units is imposed on the product, then the equilibrium price in Marketopia would be ________ and the total quantity available in Marketopia would be ________ units.
A. $7; 1,800 B. $6; 1,800 C. $6; 2,200 D. $7; 2,000
User reviews of products on store websites that reassure buyers of the quality is an example of:
A. building a reputation. B. statistical discrimination. C. screening. D. None of these statements is true.
As a result of the decrease in donut prices at Real Yum Donuts, Dippin Donuts managers discover that the demand for their donuts has: a. increased
b. decreased. c. not changed. d. none of the above
A Portuguese company exchanges euros for $60,000 from a U.S. bank. The Portuguese firm then uses the dollars to purchase $60,000 of canning equipment from a U.S. company. As a result of these two transactions alone
a. both U.S. net capital outflow and U.S. net exports rise. b. U.S. net capital outflow rose and U.S. net exports fall. c. U.S. net capital outflow fell and U.S. net exports rise. d. both U.S. net capital and U.S. net exports fall.