If the cross-elasticity of demand for two goods is positive, this means that the goods are:
A. normal goods.
B. inferior goods.
C. substitutes.
D. complements.
Answer: C
Economics
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Refer to Figure 8.1. If Charla and Mirna agree to pay each other $350 to install the pollution-control device on their heating systems, the Nash equilibrium would be found when Charla plays ________ and when Mirna plays ________
A) Install; Install B) Install; Don't Install C) Don't Install; Install D) Don't Install; Don't Install
Economics
Give an example where a government subsidy can correct an externality. Explain how the subsidy would lead to a more efficient outcome
What will be an ideal response?
Economics