If the cross price elasticity of demand for tacos with respect to burritos equals +2.5, then:
a. a 1% increase in the quantity of burritos purchased will lead to a 2.5% increase in the price of a taco
b. a 10% increase in the price of a burrito will lead to a 25% increase in the quantity of tacos demanded at a given price.
c. a 1% decrease in the price of a burrito will lead to a 2.5% increase in the quantity of tacos demanded at a given price.
d. a 1% increase in the quantity of tacos purchased will lead to a 2.5% increase in the price of a burrito.
b
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As long as the marginal utility per dollar from pizza is greater than the marginal utility per dollar from soda, then to maximize utility a consumer will buy
A) more soda to equalize the marginal utility per dollar between soda and pizza. B) less pizza and less soda. C) more pizza and less soda. D) equal amounts of pizza and soda.
All other things unchanged, we expect that an increase in interest rates will tend to
A) increase the quantity of money demanded and increase velocity. B) increase the quantity of money demanded and reduce velocity. C) reduce the quantity of money demanded and increase velocity. D) reduce the quantity of money demanded and reduce velocity.