If we are trying to determine if two different products are substitutes, complements, or not related at all, we should find the value of the
A) price elasticity of demand for both goods.
B) price elasticity of supply for both goods.
C) income elasticity of demand for both goods.
D) cross elasticity of demand.
E) price elasticity of demand and the price elasticity of supply for both goods.
D
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Assume the production of a good gives rise to external benefits. The government may increase efficiency by
A) subsidizing consumption of the good. B) requiring all producers of the good to be licensed. C) taxing production of the good. D) imposing taxes on the good.
The General Agreement on Tariffs and Trade (GATT) was established in
a. 1870 to protect U.S. industries and decrease world trade b. 1921 to manage legal and accounting requirements for U.S. tariffs and quotas c. 1947 to reduce trade restrictions among 23 countries d. 1973 to increase trade restrictions, after OPEC significantly raised oil prices e. 1990 to create a common market
"Dividing the economic pie more equally may reduce the size of the economic pie." This argument is characterized as:
a. untrue. b. a form of discrimination. c. a conflict between equity and efficiency. d. a conflict between full employment and economic growth. e. b and c.
In the short-run velocity is not constant. Which of the following variables can be affected by a change in money supply?
I. real GDP II. nominal GDP III. the price level A) III only B) II and III C) I, II, and III D) If velocity is not constant, then none of the variables is affected.