A 10 percent increase in the price of root beer causes a 5 percent increase in the quantity demanded of orange soda. This means that
a. root beer and orange soda are substitutes
b. root beer and orange soda are complements
c. the cross-price elasticity of demand is elastic
d. the cross-price elasticity of demand is equal to 2
e. the cross-price elasticity of demand is equal to -2
A
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The majority of elementary and secondary school expenditures is financed by federal and state income taxes
Indicate whether the statement is true or false
If excess reserves are $10,000, demand deposits are $100,000, and the required reserve ratio is 10 percent, then total reserves are
A. $0. B. $110,000. C. $20,000. D. $10,000.
Suppose that only one curve shifts. If you observe that the equilibrium price and equilibrium quantity decreased, then the market experienced a(n):
A. decrease in supply. B. increase in demand C. increase in supply. D. decrease in demand.
Suppose that in a month the price of a liter of soda increases from $1 to $1.50. At the same time, the quantity of liters of soda supplied increases from 200 to 210. The price elasticity of supply for liters of soda (calculated using the initial value formula) is:
A. 0.1. B. 0.5. C. 10. D. 20.