Maddy purchases 2 pounds of beans and 3 pounds of rice per month when the price of beans is $2 per pound. She purchases 1 pounds of beans and 4 pounds of rice per month when the price of beans is $3 per pound. Maddy's cross-price elasticity of demand for beans and rice is
a. 0.71, and they are substitutes.
b. -0.71, and they are complements.
c. 1.4, and they are substitutes.
d. -1.4, and they are complements.
a
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A market is allocatively efficient if
A) the sum of the consumer surplus and the producer surplus has been maximized. B) consumer surplus has been maximized. C) producer surplus has been maximized. D) profit has been maximized.
Behavioral economics refers to the study of situations
A) where consumers and firms appear to value fairness when they make choices. B) where consumers and firms disobey the laws of demand and supply. C) where consumers and firms appear to make choices that are appropriate to reach their goals. D) where consumers and firms do not appear to be making choices that are economically rational.