In the above table, the cross price elasticity of demand (using averages) for C with good A, when PA increases from $12 to $15, is approximately equal to
A. +1.03
B. +0.44.
C. -0.44.
D. +2.26.
Answer: B
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The above figure shows the market for rice in Japan. S2 represents the domestic supply curve, and S1 represents the world supply curve. If a $1 tariff is imposed on imported rice, the loss in social welfare is
A) b + c + d + e. B) a. C) i. D) a + c + d + e.
The demand for products that provide benefit externalities is generally ________ the demand for products that do not
A) greater than B) less than C) the same as D) greater or less (depending on the market) than
Marginal cost is:
A.) The change in total costs because of a one-unit increase in output. B.) Total cost divided by the rate of output. C.) Total revenue minus total cost. D.) The average profit divided by the quantity sold.
During the production process Ajax Corporation releases pollution into the air. Ajax Corporation operates in a monopolistic competitive industry. Which of the following statements addresses the pollution situation?
A) Ajax is taking advantage of asymmetric information. B) This is an example of a market failure and is a reason for the government to regulate the industry. C) The quality of the product could be improved if the amount of pollution can be reduced. D) This is known as the lemons problem.