After a $5 million ad campaign, Coca-Cola measured its effectiveness by calculating the cross elasticity of demand between Coke and Pepsi. A successful campaign would be indicated if the cross elasticity went from
a. 0.9 to 0.5.
b. 0.9 to 1.5.
c. ?0.5 to ?0.2.
d. ?0.9 to ?1.5.
a
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If the Fed raises the federal funds rate, eventually the
A) AD curve shifts rightward and real GDP increases. B) AD curve shifts leftward and real GDP decreases. C) AS curve shifts rightward and real GDP increases. D) AS curve shifts leftward and real GDP decreases. E) AD curve shifts rightward and real GDP decreases.
If a production technology has diminishing marginal product of all inputs throughout, then the producer choice set is convex.
Answer the following statement true (T) or false (F)
Refer to Figure 18-3. Consider the market for U.S. dollars against the Japanese yen shown above. An event which could have caused the changes shown in the graph would be
A) an increase in U.S. real income. B) an economic expansion in the United States. C) speculators expect the dollar to depreciate in value in the near future. D) a decrease in Japanese interest rates.
Which of the following does NOT shift the IS curve?
A) an increase in autonomous consumption B) an increase in government spending C) a decline in government spending D) a fall in the interest rate