The cross-price elasticity of demand is the percentage change in the quantity of good A that is demanded as a result of a percentage change in the price of good B.
Select whether the statement is true or false.
A. True
B. False
A. True
This statement is true. The cross-price elasticity of demand is the percentage change in the quantity of good A that is demanded as a result of a percentage change in the price of good B.
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Why does redistribution, so that the distribution of income is equal, bring about less total output?
A) Incentives to work are reduced. B) No one can determine marginal benefit or marginal cost as a result. C) Those in political power will likely receive a larger income. D) Because the marginal benefit and marginal cost of work have been equally increased. E) The premise of the question is incorrect because an equal distribution of income would increase rather than decrease the total amount produced.
For a firm in a perfectly competitive market, a price decrease:
A. increases the profit-maximizing quantity. B. lowers the profit-maximizing quantity. C. is unrelated to the profit-maximizing quantity. D. signifies the firm should leave the market.
College education is an example of a positive externality.
A. True B. False C. Uncertain
Which one of the following is not a condition for a successful water market?
a. Property rights must be clearly defined b. A system must be in place to resolve conflicts c. Transaction costs must be relatively high d. Water demand must exceed water supply e. Water must be physically transferable