Cross-price elasticity of demand measures how the quantity demanded of one good changes as the price of another good changes
a. True
b. False
Indicate whether the statement is true or false
True
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When the representative firm maximizes profits
A) production is at its maximum. B) the slope of the production function is at its flattest. C) labor costs are minimized. D) the marginal product of labor equals the wage.
Johnny owns a house that would cost $100,000 to replace should it ever be destroyed by fire. There is a 0.1% chance that the house could be destroyed during the course of a year. Johnny's utility function is U = W0.5
How much would fair insurance cost that completely replaces the house if destroyed by fire? Assuming that Johnny has no other wealth, how much would Johnny be willing to pay for such an insurance policy? Why the difference?
In the U.S. economy, building human capital is more important than building physical capital
a. True b. False Indicate whether the statement is true or false
Which of the following helped transform the budget deficits of the early 1990s into surpluses later in the decade?
a. Rapid growth in the number of persons moving into the retirement phase of life during the 1990s b. A reduction in defense expenditures following the end of the Cold War c. A 1997 increase in the tax rate imposed on income derived from capital gains d. A reduction in Social Security and health-care benefits during the 1990s