If a 5 percent decrease in the price of a good results in a 20 percent increase in the demand for another good, what is the cross-price elasticity of demand?
a. +100
b. –15
c. +25
d. –4
d. –4
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An example of expansionary fiscal policy would be
A) a decrease in government spending to reduce budget deficits. B) an increase in tax collection to reduce budget deficits. C) a decrease in interest rates to help stimulate the economy. D) an increase in government spending on infrastructure to create jobs and improve the economy. E) an increase in interest rates to encourage private savings.
If a monopolist were to produce in the inelastic segment of its demand curve
A) total revenue would be at a maximum. B) total revenue would be at a minimum. C) the firm would maximize profits. D) a further drop in the price will change quantity demanded less than proportionately.
Which of the following could be responsible for a decrease in the price of wheat?
a. an increase in the supply of wheat b. an increase in the demand for wheat c. a decrease in the demand for wheat d. Either a. or c. could decrease the rice of wheat.
When consumers or businessmen stop collecting information to make decisions at the point where marginal cost of data collection equals the marginal utility of the data, economists would call the decisions based on existing data
a. perfect decisions. b. optimally imperfect decisions. c. joint decisions. d. rent seeking.