If the cross price elasticity of demand between two goods is negative, then the two goods are
A) substitutes.
B) complements.
C) unrelated.
D) independent.
Answer: B
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Over the past decade, the demand for goods produced in China has brought a sustained increase in demand for China's exports that has out-stripped the growth of supply. As a result, China has experienced a _______
A. period of stable prices and sustained economic growth B. rising price level and demand-pull inflation C. rising price level and cost-push inflation D. rising price level and a falling real wage rate
What would happen to a production possibilities frontier (with capital goods measured on the vertical axis and consumption goods on the horizontal axis) if there is an increase in the labor force?
a. The entire frontier would shift outward. b. The upper part of the frontier would shift outward while the lower part would shift inward. c. Nothing, there would be no movement of the frontier. d. The entire frontier would shift inward. e. The lower part of the curve would shift outward while the upper part would shift inward.
Under perfect competition, firms are relatively ignorant of the actions of their competitors
a. True b. False Indicate whether the statement is true or false
What is the effect of net exports, either positive or negative, on equilibrium GDP?
What will be an ideal response?