Suppose a new EU member begins substituting its imports from non-EU members to other EU members. This is an example of
A) trade diversion.
B) trade deflection.
C) free trade.
D) trade detection.
Answer: A) trade diversion.
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The network effect in the TV broadcasting industry results in
A) a positive market feedback between the number of advertisers and the size of TV audience. B) a negative market feedback between the number of advertisers and the size of TV audience. C) a positive market feedback between the number of advertisers and the number of TV channels. D) a negative market feedback between the number of advertisers and the number of TV channels.
A demand relationship in which a given percentage change in price will result in a less than proportionate percentage change in quantity demanded is
A) elastic. B) unit-elastic. C) inelastic. D) consistent with zero elasticity.