Suppose that when the price of good X changes from $5 to $10, the demand for good Y changes from 110 to 100, then the cross-elasticity of demand is:
A. 1.44 and the goods are substitutes.
B. -0.143 and the goods are complements.
C. -0.09 and the goods are complements.
D. 1.44 and the goods are complements.
Answer: B
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The use of purchasing power parity prices
A) decreases the real GDP per person statistics published by the International Monetary Fund. B) weakens the validity of cross country comparisons of economic welfare. C) increases the amount by which U.S. GDP is larger than that of any other nation. D) accounts for differences in the prices of the same goods in different countries when measuring real GDP.
An externality is:
a. always a benefit to the recipient. b. always a detriment to the recipient. c. an activity that occurs in a business which is unknown to management. d. unintended benefits or costs imposed on third parties as a result of economic activity. e. an act, caused by a firm located in this country, which has an effect on a person in a foreign country.
Price controls
a. always produce a fair outcome. b. always produce an efficient outcome. c. can generate inequities of their own. d. All of the above are correct.
Each point on a ________ curve shows the willingness of consumers to purchase a product at different prices
A) demand B) supply C) production possibilities D) marginal cost