The cross elasticity between two goods, X and Y, is positive. From this, we can conclude that goods X and Y are:
a. substitute goods.
b. complementary goods.
c. unrelated goods.
d. inferior goods.
e. normal goods.
a
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If an import-competing firm is the only domestic producer of a good, then a transition from autarky to free trade will ________ domestic price, ________ producer surplus, ________ consumer surplus, and ________ overall domestic national welfare
A) decrease; decrease; increase; increase B) increase; increase; increase; increase C) decrease; decrease; decrease; decrease D) increase; increase; decrease; decrease E) increase; increase; decrease; increase
Under adaptive expectations theory, people persistently:
a. underestimate inflation when it is slowing down. b. overestimate inflation when it is accelerating. c. underestimate inflation when it is accelerating. d. adapt to the prevailing inflation rate.
If a tax is imposed on a market with inelastic supply and elastic demand, then
a. buyers will bear most of the burden of the tax. b. sellers will bear most of the burden of the tax. c. the burden of the tax will be shared equally between buyers and sellers. d. it is impossible to determine how the burden of the tax will be shared.
__________________ is attained when the maximum possible output of any one good is produced, given the output of other goods.
A. Productive efficiency B. Economic growth C. Opportunity cost D. Employment discrimination