The "Applied Perspective" titled "Cross Elasticity in the Salmon Industry" suggests that the cross elasticity of demand between farm-raised salmon and wild salmon is
a. positive and fairly large so the two types of fish are close substitutes consumers
b. positive but close to zero so the two types of fish are in different markets
c. negative because consumers like to serve both types as complementary goods
d. high so that a price decrease leads to a total revenue increase
e. low so that a price decrease leads to a total revenue decrease
A
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Which of the following activities creates a negative externality?
A) cleaning up a public garden in your neighborhood B) graduating from college C) keeping an old refrigerator on your front porch D) using a pooper-scooper every time you walk your dog
Suppose the economy is in an equilibrium in which real GDP is less than potential GDP. To increase real GDP, the government can use a fiscal stimulus of
A) increasing taxes only. B) decreasing government expenditure only. C) decreasing taxes and/or increasing government expenditure. D) decreasing government expenditure and simultaneously increasing taxes. E) increasing the quantity of money.