When the price of pens went from $1 to $1.50, the quantity demanded of pencils changed from 50 to 75 a day. The cross-price elasticity of demand for pens (using the initial value formula) is:

When production of a good results in an external cost, the unregulated competitive market equilibrium quantity is

A) the efficient level of output. B) greater than the efficient level of output. C) not zero but is less than the efficient level of output. D) unattainable. E) zero.

The economy is in a recession. The government enacts a policy to increase spending by $2 billion. The MPS is 0.2. What would be the full increase in real GDP from the change in government spending assuming that the aggregate supply curve is horizontal across the range of GDP being considered?

A. $6 billion B. $8 billion C. $10 billion D. $16 billion