Suppose that when the price of good X falls from $10 to $8, the quantity demanded of good Y rises from 20 units to 25 units. Using the midpoint method, the cross-price elasticity of demand is
a. -1.0, and X and Y are complements.
b. -1.0, and X and Y are substitutes.
c. 1.0, and X and Y are complements.
d. 1.0, and X and Y are substitutes.
a
You might also like to view...
The quantity of labor demanded by a firm depends upon
A) the nominal wage rate not the real wage rate. B) the real wage rate not the nominal wage rate. C) both the real wage rate and the nominal wage rate. D) neither the real wage rate nor the nominal wage rate. E) either the real wage rate or the nominal wage rate, depending whether the price level is increasing or decreasing.
Refer to the scenario above. Suppose you decide to buy a Toyota Corolla. You value the car for $10,000. You don't know it, but the car dealer values it for $8,500. Which of the following is true in this case?
A) There are no gains from trade. B) There are gains from trade. C) There are negative economies of scale. D) There are positive economies of scale.
Sonya's budget for magazines and chocolate bars is $50. Her marginal utility from these goods is shown in the table above. If the price of a magazine is $5 and the price of a chocolate bar is $2
50, which of the following combinations maximizes Sonya's utility? A) 1 magazine and 18 chocolate bars B) 2 magazines and 20 chocolate bars C) 3 magazines and 14 chocolate bars D) 5 magazines and 10 chocolate bars
The concentration ratio of industry is a measure relating to the proportion of the industry's total output that is produced by a small number of firms
a. True b. False Indicate whether the statement is true or false