The fact that the cross-price elasticity of natural gas with respect to the price of fuel oil is 0.4 implies that
A. natural gas and fuel oil are substitutes.
B. natural gas is a normal good.
C. the quantity of natural gas demanded will decrease by 1.6% when the price of fuel oil decreases by 4%.
D. both a and c
Answer: D
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Suppose a company trying to increase profits, markets its laptops at a price that is higher than the equilibrium price of laptops in the market. Which of the following is likely to happen as a consequence?
a. The equilibrium price of laptops will increase to the level charged by this brand. b. There will be an excess supply of this particular brand of laptops in the market. c. There will be an excess demand for this particular brand of laptops in the market. d. The equilibrium price of laptops will decrease.
According to Figure 11.2, a shift from AD1 to AD2 will
A. Eliminate the GDP gap because of the increase in output. B. Move the economy to point Y and then the market mechanism will move the economy to point Z. C. Move equilibrium to point Y where the price level is higher than before. D. Move equilibrium to QF.
You decide to spend time studying for a philosophy exam, even though you have offers to go to see a movie, go out to dinner, or go to a poetry reading
This is a difficult choice for you because you really want to go to the poetry reading and would choose that over seeing the movie or going out to dinner. Your opportunity cost of spending time studying for your philosophy exam is A) going to the movie. B) going out to dinner. C) going to the poetry reading. D) all of the above, since you have offers to do all three
A decrease in ________ tends to decrease ________ and therefore decrease ________
A) cost; price; supply B) cost; demand; price C) demand; price; cost D) supply; cost; price