Put the following products in order from lowest to highest based on their cross-price elasticity of demand with peanut butter: bread, bologna, floppy disks. Justify your answer.
What will be an ideal response?
Bread has a negative cross-price elasticity because bread and peanut butter are complements. Floppy disks have a zero cross-price elasticity because they are unrelated to peanut butter. Bologna will have a positive cross-price elasticity because it is a substitute for peanut butter.
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The United States is the largest national economy in the world.
Answer the following statement true (T) or false (F)
The fewer the stockholders in a corporation the __________ likely they are to be motivated to monitor the corporation's management, thus the __________ the severity of the manager-stockholder conflict
A) more; greater B) more; fewer C) less; greater D) less; fewer
How does adverse selection in financial markets affect the method by which firms raise funds?
What will be an ideal response?
Explain why a consumer may be willing to drive 20 miles to save 10% on a $3 gallon of milk, but is not willing to drive the same 20 miles to save 3% on a $500 refrigerator.
What will be an ideal response?