There are two closely related crops, X and Y, with the following demand functions QX = 180 - 2PX + PY and QY = 150 + PX - PY where QX is the quantity of X, PX is the price of X, QY is the quantity of Y, and PY is the price of Y. These two crops are grown in two widely separated countries so there is no interrelationship between the supply curves. The short-run perfectly inelastic supply for X is
200 while the short-run perfectly inelastic supply for Y is 100. In equilibrium, the prices are
A) PX = 30, PY = 80.
B) PX = 40, PY = 60.
C) PX = 60, PY = 120.
D) PX = 80, PY = 130.
A
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Each of the following provides incentives to reduce a negative externality except:
a. merger with affected firms. b. subsidizing consumption of the good being produced. c. bargaining among firms. d. taxation of the externality.
Increasing U.S. trade deficits result in: a. federal budget surpluses
b. increased U.S. savings. c. reduced purchases of U.S. government bonds by people in other countries. d. accumulation of dollars overseas. e. increased U.S. investment abroad.
Explain the three different types of money demand.
What will be an ideal response?
Fiscal policy involves discretionary changes in
A. the rate of growth of the money supply. B. interest rates. C. lump-sum taxes. D. exchange rates.