For many consumers, bacon and eggs are complements. Therefore, egg producers monitor the price of bacon because the cross elasticity between bacon and eggs is
A. negative, and a decrease in the price of bacon will increase the demand for eggs.
B. positive, and an increase in the price of bacon will increase the demand for eggs.
C. negative, and a decrease in the price of bacon will decrease the demand for eggs.
D. positive, and a decrease in the price of bacon will increase the demand for eggs.
Answer: A
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Last year your job at the university cafeteria paid you $9 an hour and the price of a music download was $1.00. This year your cafeteria job pays $9.90 per hour and download costs $1.10. You are clearly
A. worse off because of inflation. B. worse off because the download is now relatively more expensive. C. better off because your wage rate went up. D. better off because the download now costs less work.
Voucher programs for housing
A. provide rent vouchers for existing housing stock. B. are underutilized with a surplus of housing stock. C. provide down payment assistance to purchase homes. D. are known as Section 8.
When the price of apples goes up:
A. the demand for apples will decrease, ceteris paribus. B. the demand for apples will increase, ceteris paribus. C. the quantity of apples demanded will decrease, ceteris paribus. D. the quantity of apples demanded will increase, ceteris paribus.
The imposition of a per unit tax on a product
A. will cause the supply curve to shift upward and to the left. B. will cause the supply curve to shift downward and to the right. C. will reduce the quantity supplied of the product. D. will encourage producers to increase the quantity supplied of the product.