How much the demand for one good changes in response to a change in the price of a different good is measured by:
A. income elasticity.
B. price elasticity of demand.
C. cross-price elasticity.
D. price elasticity of supply.
Answer: C
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Use the following diagram to answer the next question. 
The diagram illustrates the pattern of
A. wage movements over time. B. business cycles. C. price level movements. D. economic growth patterns.
Assume the interest rate on a current one-year bond is 3%, and the expected interest rate on the one-year bond one year from now is 6%. If the term premium on a two-year bond is 0.5%, then the interest rate on the two-year bond will be
A) 4%. B) 4.5%. C) 5%. D) 6.5%.
Government mandating that every driver have a minimum amount of car insurance addresses the problem of:
A. illegal screening. B. statistical discrimination. C. moral hazard. D. adverse selection.
In the above table, the cross price elasticity of demand for good C with good B when PB rises from $15 to $18 is
A. +2.20. B. -1.10. C. +1.10. D. -2.20.