Suppose that the quantity of apples sold increases by 30 percent after the price of pears increases by 15 percent. What is the coefficient of cross elasticity of demand?
A. 3.0.
B. 1.5.
C. 0.2.
D. 2.0.
Answer: D
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Which of the following is true of equilibrium?
A) Equilibrium refers to a situation where an economic agent can be made better off without making anyone else worse off. B) Equilibrium refers to a situation where the government allocates resources among economic agents. C) Equilibrium refers to a situation where all economic agents are making sub-optimal choices and have an incentive to change behavior. D) Equilibrium refers to a situation where all economic agents simultaneously optimize after considering each other's actions.
An increase in the amount of physical capital will cause
A) an increase in both aggregate demand and real GDP, but have no effect on the price level. B) an increase in both aggregate supply and real GDP, but have no effect on the price level. C) aggregate demand and aggregate supply to increase by the same amounts, causing real GDP to increase and the price level to remain constant. D) an increase in both aggregate supply and real GDP and a reduction in the price level.
Which of the following statements is correct?
A) When a line slopes downwards moving to the right, the variable measured on the x-axis and the variable measured on the y-axis are directly related. B) When a line slopes upwards moving to the right, the variable measured on the x-axis and the variable measured on the y-axis are directly related. C) The higher the temperature, the more ice cream people consume. Thus the temperature and ice cream consumption are inversely related. D) If two variables are directly related, a graph of the two variables has a negative slope. E) None of the above statements is correct.
Refer to the information provided in Figure 14.1 below to answer the question(s) that follow.
Figure 14.1Refer to Figure 14.1. Firms form a cartel that maximizes profits. The profits are
A. $0. B. $1,080. C. $1,800. D. indeterminate from this information.