The cross-price elasticity of demand between goods X and Y is ?3.5. If the price of X decreases by 7 percent, the quantity demanded of Y will:
A. increase by 2.45 percent.
B. decrease by 2.45 percent.
C. decrease by 24.5 percent.
D. increase by 24.5 percent.
Answer: D
You might also like to view...
In many poor nations, the minimum standard of living is set so low that relatively few people get counted as poor
Indicate whether the statement is true or false
Supply curves are usually assumed to slope upward because
a. profits fall as prices rise b. a higher price leads to increases in demand c. a higher price leads to decreases in demand d. a higher price attracts resources from other less valued uses e. firms drop out of the market as prices rise
The neoclassical perspective on macroeconomics holds that the economy will fluctuate around its potential GDP and its natural rate of __________________ in the long run.
a. unemployment b. production c. supply d. demand
Which of the following resulted from the Smoot-Hawley trade bill of 1930?
a. The stock market began a steady recovery from the crash of October 1929. b. Many countries responded by imposing higher tariffs on American products, and the volume of international trade fell sharply. c. Imports decreased, while exports increased, resulting in an overall increase in GDP and tariff revenues. d. The unemployment rate, which had been rising, began to steadily decline as jobs were protected by the trade restrictions.