Suppose we have two pairs of substitute goods. The first are very close substitutes, such as Coke and Pepsi, while the others are less close, such as Coke and iced tea. We would expect the cross elasticity of the closer pair to be
a. positive while the less close pair to be negative
b. negative while the less close pair to be positive
c. one while the less close pair to be zero
d. the smaller of the two
e. the larger of the two
E
You might also like to view...
Refer to the figure below. If the price is $4 today and there is no change in either supply or demand, one would expect the price in the future to be:
A. greater than $6. B. $4. C. less than $4. D. greater than $4.
If nominal GDP is $10 trillion, and the money supply is $2 trillion, velocity is
A) 0.2. B) 5. C) 10. D) 20.
With a monopolist's outcome, consumer surplus is:
A. higher than that of a competitive market. B. lower than that of a competitive market. C. the same as that of a competitive market. D. Any of these is possible.
Other things the same, if the long-run aggregate supply curve shifts left, prices
a. and output both increase. b. and output both decrease. c. increase and output decreases. d. decrease and output increases.