Suppose inter-city bus travel is a substitute for transportation by train. Which of the following could then be TRUE?
A) The cross elasticity between bus and train travel could equal 0.65.
B) The cross elasticity between bus and train travel could equal 1.0.
C) The cross elasticity between bus and train travel could equal 1.25.
D) All of the above could be true.
D
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Ford Motor Corporation is considering purchasing new technology that will increase productivity by twenty percent. If Ford Motor Corporation decides to make this investment at the going real interest rate, then
A) Ford's profits will decline. B) the demand for loanable funds increases. C) the supply of loanable funds increases. D) the quantity of loanable funds demanded increases. E) saving increases.
In the figure above, the price of bonds would fall from P2 to P1 if
A) there is a business cycle recession. B) there is a business cycle expansion. C) inflation is expected to increase in the future. D) inflation is expected to decrease in the future.
All of the following result from price floors in agriculture EXCEPT
A) surpluses of agricultural products that have price floors. B) higher prices to consumers for agricultural products that have price floors. C) lower prices to consumers for agricultural products that have price floors. D) governmental bureaucracy.
Suppose that a "doggie day care" firm uses only two inputs: hourly workers (labor) and a building (capital). In the short run, the firm most likely considers
a. both labor and capital to be fixed. b. both labor and capital to be variable. c. labor to be variable and capital to be fixed. d. capital to be variable and labor to be fixed.