Considering the concept of cross-price elasticity, if two goods are complements:
A. the cross-price elasticity is positive.
B. a decrease in the price of one will cause a decrease in the demand for the other.
C. an increase in the price of one will cause an increase in the demand for the other.
D. an increase in the price of one will cause a decrease in the demand for the other.
Answer: D
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Smith and Jones comprise a two-person economy. Their hourly rates of production are shown below. CalculatorsPer HourComputersPer HourSmith10010Jones1206Suppose Smith and Jones begin by producing 16 computers and 0 calculators per hour. If they wish to produce 14 computers and 40 calculators per hour efficiently, then Smith should spend ________, and Jones should spend ________.
A. 30 minutes on each; 30 minutes on each B. 1 hour on computers; 40 minutes on computers and 20 minutes on calculators C. 1 hour on computers; 20 minutes on computers and 40 minutes on calculators D. 45 minutes on computers and 15 on calculators; 1 hour on calculators
If the marginal propensity to consume is 0.8 and if government spending (G) rises by 50 while investment (I) falls by 20, by how much will equilibrium income rise?
a. 12 b. 10 c. 30 d. 120 e. 150
Goldin (2001) refers to the 20th century as the "human capital" century and credits education for the rise in overall income
Indicate whether the statement is true or false
When inflation increases by more than what people expect:
A. lenders lose while debtors gain. B. both lenders and debtors lose. C. debtors lose and lenders gain. D. both lenders and debtors gain.