When two goods are unrelated,
A) their cross price elasticity of demand will be infinity.
B) their cross price elasticity of demand will be 0.
C) their cross price elasticity of demand will be negative.
D) their cross price elasticity of demand will be positive.
Answer: B
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The quantity supplied by domestic producers in an importing country must be less than the quantity demanded by its population.
Answer the following statement true (T) or false (F)
The price of coffee rose 50 percent and coffee sales fell 25 percent. Doughnut sales also fell 25 percent. From this information, we can conclude that
A. demand for coffee is inelastic. B. coffee and doughnuts are complements. C. the cross elasticity of demand is minus 0.5 percent. D. All of the responses are correct.
Suppose the majority of the shares of British Airways stock were sold to a firm in the United States. Assuming all else remains constant, this will
A) create a capital inflow in the United States. B) decrease the balance of the U.S. financial account. C) increase net portfolio investment in the United States. D) decrease the balance of the U.S. current account. E) decrease foreign direct investment in the United States.
The circular flow model illustrates that aggregate spending in the product markets equals 70 percent of aggregate income earned in the factor markets
a. True b. False Indicate whether the statement is true or false