The cross-elasticity of demand between Homer's Holesome Doughnuts and Krusty's Krispy Crullers is 5.0, which indicates that Homer's doughnuts and Krusty's crullers are
A) complements and the relationship between the two goods is strong (that is, the quantity demanded of doughnuts is very responsive to changes in the price of crullers).
B) complements and the relationship between the two goods is weak (that is, the quantity demanded of doughnuts is not very responsive to changes in the price of crullers).
C) substitutes and the relationship between the two goods is strong (that is, the quantity demanded of doughnuts is very responsive to changes in the price of crullers).
D) substitutes and the relationship between the two goods is weak (that is, the quantity demanded of doughnuts is not very responsive to changes in the price of crullers).
C
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Many economists are critical of proposals to pass comparable worth legislation. Which of the following is the best explanation for this criticism?
A) Proposals for comparable worth legislation assume that wages for low-paying women's jobs should include compensating differentials. Economists believe that compensating differentials should be part of the wages for all jobs held by women. B) Proposals for comparable worth legislation call for increases in the wages of jobs held predominantly by women. Economists believe that this legislation should be used to increase the wages of all workers. C) Many economists believe that allowing markets to determine wages, rather than the rules required by comparable worth legislation, results in more efficient outcomes. D) Comparable worth legislation will only lead to efficient market outcomes if women in low-paying jobs suffer from cognitive dissonance.
With reference to the graph above, if the intended aim of the price ceiling set at $6 was a net increase in the well-being of consumers, then positive analysis would conclude:
A. the policy was effective, since surplus gained by consumers through lower prices is greater than the surplus they lost through deadweight loss.
B. the policy was ineffective, since surplus gained by consumers through lower prices is less than the surplus they lost through deadweight loss.
C. the policy was effective, since surplus lost by producers through lower prices is less than the surplus gained by consumers through lower prices.
D. the policy was ineffective, since the amount of deadweight loss is greater than the surplus gained by consumers from lower prices.
The sum of capital inflows and the trade balance must be zero
a. True b. False Indicate whether the statement is true or false
During 1929-1933, monetary policy was
a. highly expansionary and this led to an increase in the general level of prices. b. characterized by steady monetary growth, which resulted in price stability. c. characterized by a sharp reduction in the supply of money, which led to downward pressure on prices and a decline in output. d. highly expansionary and this led to a reduction in the general level of prices.