The recent reduction in the price of oil has increased the demand for foreign automobiles. Based on this statement, what may be concluded about price, cross-price, or income elasticity of demand?
What will be an ideal response?
The cross-price elasticity of demand between foreign automobiles and oil is negative, suggesting complementary products.
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Refer to Table 20.1. George is a single taxpayer with an income of $65,000. If George had received a raise of $3,500 at the beginning of the year, his average tax rate would be
A) 22.99%. B) 23.75%. C) 32.5%. D) 38%.
Refer to Figure 2-10. In the circular flow diagram, economic agents M represent
A) product markets. B) firms. C) factor markets. D) households.
A policy that directly targets the externality:
A. encourages innovation, which matches the goal to stop production of the externality. B. gives firms incentives to find different ways to do things, rather than pay for the right to create the externality. C. Both of the above statements is true. D. None of these statements are true.
Megan, an analyst in Ronald's team called in sick on a day when 4 projects were due for completion. Ronald divided Megan's work between the remaining six team-members. Which form of governance is being used here?
a. Etiquette b. Hierarchy c. Contract d. Market