If the cross-price elasticity of two goods is 0.25, then we know that these goods are:
A. substitutes because their cross-price elasticity is greater than zero.
B. substitutes because their cross-price elasticity is less than 1.
C. complements because their cross-price elasticity is greater than zero.
D. complements because their cross-price elasticity is less than 1.
Answer: A
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The short-run supply curve for a perfectly competitive firm is that portion of the MC curve above the AVC curve
a. True b. False Indicate whether the statement is true or false
Answer the following statements true (T) or false (F)
1. If the newspapers report that there is a shortage of strawberries, it must mean that the current price of strawberries is below the equilibrium price. 2. If there is a surplus in a market, competition among the sellers will drive price down. 3. If we observe that the price of gold is rising and the quantity of gold traded in the market is falling, then this must be the result of an increase in the supply of gold. 4. When the government requires ethanol from corn to be used as an additive to gasoline, the supply of corn decreases.
Which of the following is NOT a determinant of demand?
A) consumers' incomes B) prices of other goods C) consumers' tastes D) production technology
Ceteris paribus, an increase in the price of a good will cause the
a. quantity demanded of the good to increase. b. quantity supplied of the good to decrease. c. consumer surplus derived from the good to decrease. d. demand of the good to increase.