We would expect the cross elasticity of demand between Pepsi and Coke to be:
A. positive, indicating normal goods.
B. positive, indicating inferior goods.
C. positive, indicating substitute goods.
D. negative, indicating substitute goods.
Answer: C
Economics
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The figure above illustrates a linear demand curve. If the price falls from $6 to $4
A) total revenue increases. B) total revenue decreases. C) total revenue remains unchanged. D) quantity demanded increases by more than 100 percent.
Economics
One way to explain the convexity of isoquants is to say that
A) as labor increases and capital decreases, MPL rises while MPK falls. B) as labor increases and capital decreases, MPL falls while MPK rises. C) as labor increases and capital decreases, MPL and MPK both fall. D) as labor increases and capital decreases, MPL and MPK both rise.
Economics