Cross-price elasticity of demand is used to determine whether
a. a product is an inferior or normal good
b. a product is a necessity or a luxury
c. two products are substitutes or complements
d. price and total revenue are directly or inversely related
e. the product's demand curve is linear
C
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Changes in stock prices
A) do not affect people's wealth and their willingness to spend. B) affect firms' decisions to sell stock to finance investment spending. C) occur in regular patterns. D) are unimportant to decision makers.
Which of the following is a method for solving the problem of adverse selection?
A) truth in advertising laws B) product liability laws C) food labeling requirements D) All of the above.
Benefits of free trade include all of the following EXCEPT
A) increased world production. B) higher standards of living. C) transmission of new ideas. D) increased international mobility of labor.
Perfectly competitive firms that earn an economic profit in the short run choose the output that
a. maximizes total revenue b. minimizes total cost c. maximizes the difference between total revenue and total cost d. maximizes the difference between total revenue and explicit cost e. maximizes the difference between total revenue and implicit cost