Which pair of goods is most likely to have a negative cross-price elasticity?
A. Peanut butter and jelly.
B. Milk and pencils.
C. All cross-price elasticities are negative, but often reported in absolute value.
D. Butter and margarine.
Answer: A
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Assuming that turkey, chicken, pork, and beef are substitutes, suppose that the price of turkey has fallen. This will, other things being equal
A) reduce demand for chicken, pork, and beef. B) leave demand for chicken, pork, and beef unchanged. C) increase demand for chicken, pork, and beef. D) increase quantity demanded of beef.
Which theories of the economy lead to the assertion that markets "self-adjust" to deviations from their long-term growth trend?
A. Keynesian theories B. Monetarist theories C. Classical theories D. Supply-side theories
Suppose government purchases increase by $100 million in an economy, which leads to total output increasing by $500 million. The size of the multiplier is _____
Fill in the blank(s) with the appropriate word(s).
Scarcity is caused by
A) unlimited wants running up against limited economic resources. B) a company's slow production speed. C) an individual's budget that is insufficient to cover the expenses of certain goods or services. D) shortages.