The measure used to determine whether two products are substitutes or complements is called
A. price elasticity of demand.
B. income elasticity of demand.
C. cross elasticity of demand.
D. inverse elasticity of demand.
Answer: C
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In economics, the entrepreneur is the person who
a. acts as the go-between among different manufacturers. b. puts together land, labor, and capital and tries to make a profit. c. is a shrewd business executive who works as a consultant to other businesses to show them more profitable methods of operation. d. is a visiting diplomat from France.
Suppose acre A is located at the market with zero transport costs of bringing its radishes to market. It costs acre B, located 20 miles away, $500 to transport its radishes to market. If demand for radishes is large enough so that both acres will be used to produce radishes,
a. the owner of acre A will earn zero location rent b. the owner of acre B will earn location rent of $500 c. the owners of acres A and B will earn combined location rents of $1,000 d. as long as one acre is located at the market, neither landowner of acre A nor B will earn location rent e. the owner of acre A will earn a location rent of $500
If aggregate supply is upward sloping, an increase in aggregate demand will result in:
A. An increase in prices and a decrease in output. B. An increase in prices and an increase in output. C. A decrease in prices and a decrease in output. D. A decrease in prices and an increase in output.
When will stabilization policy be most effective in combating inflation?
A. When AS is flat B. When AS is very steep C. When AS has a moderately upward slope D. When AS has a moderately downward slope