A firm derives revenue from two sources: goods X and Y. Annual revenues from good X and Y are $10,000 and $20,000, respectively. If the price elasticity of demand for good X is ?2.0 and the cross-price elasticity of demand between Y and X is 1.5, then a 4 percent increase in the price of X will:
A. increase total revenues from X and Y by $400.
B. increase total revenues from X and Y by $800.
C. decrease total revenues from X and Y by $400.
D. increase total revenues from X and Y by $8,000.
Answer: B
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If, when price changes by 35 percent, the quantity demanded changes by 7 percent, then the absolute value of the price elasticity of demand is 5
Indicate whether the statement is true or false
The dependence on the export of one or two primary products for a majority of the revenue from exports is most severe in countries in
(a) South Asia. (b) East Asia. (c) Sub Saharan Africa. (d) Latin America.
If the dependent variable Y is directly related to the independent variable X, this means that changes in X cause changes in Y
a. True b. False
A theory is
A) built on the major factors or variables that the theorist believes explain some event. B) a simplified abstract representation of the real world. C) used to understand the real world. D) a and b E) a, b, and c