If the cross price elasticity between Goods A and B equals 0.7, then a reduction in the price of Good B will:
a. increase the demand for Good A and increase Good A's price as a result.
b. increase the demand for Good A and decrease Good A's price as a result.
c. decrease the demand for Good A and increase Good A's price as a result.
d. decrease the demand for Good A and decrease Good A's price as a result.
d
You might also like to view...
If Florida issues an alligator hunting permit to Jackson, who values an alligator hunt at $2,500, instead of Oliver, who values an alligator hunt at $4,000, the $1,500 difference in values is
A) a deadweight loss. B) a negative externality. C) a transactions cost. D) the social cost of the alligator hunt.
Nominal GDP can change
A) only if prices change. B) only if the quantities of goods and services change. C) only if prices increase. D) if either prices or the quantities of goods and services change. E) only if prices and the quantities of the goods and services change.
The world distribution of income has become more equal since 1970 because
A) the distribution of income within most countries has become more equal. B) foreign aid programs from rich nations have increased in size and especially in effectiveness. C) average incomes in poor nations, such as China, have risen faster than average incomes in rich nations, such as the United States. D) None of the above answers are correct.
At an output level of 100, a monopolist faces MC = 15 and MR = 17. At output level q = 101, the monopolist faces MC = 16 and MR = 15. To maximize profits, the firm
A) should produce 100 units. B) should produce 101 units. C) The firm cannot maximize profits. D) The firm is not a monopoly.