If the cross-price elasticity of demand between two goods is -1.2, then the two goods are:
A. elastically demanded.
B. inferior.
C. complements.
D. substitutes.
Answer: C
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Quasiconcave production functions give rise to convex producer choice sets.
Answer the following statement true (T) or false (F)
How are the coordination problem and timing problem of monetary policy similar?
a. Both deal with a lack of control over certain factors. b. Both deal with foreign financial entities. c. Both focus on fiscal and monetary interactions. d. Both focus on nonbank institutions.
The long-run aggregate supply curve is ... because along it, as prices rise, the money wage rate ...
What will be an ideal response?
The Interstate Commerce Commission (ICC) regulates railroads, barges and trucks. Suppose technical change lowers the costs of railroads. As a result, the ICC permits railroads to lower prices some but also alters the rates of barges and trucks so they
get additional business. The ICC would be acting consistently with A) the capture theory of regulation. B) the public interest theory of regulation. C) the share-the-gains, share-the-pains theory of regulation. D) None of the theories presented in the text since economic regulation is specific to a single industry and not to agencies that cover more than one industry. That is the province of social regulation.