If the cross price elasticity of demand for fries with respect to hamburgers equals -1.2, then:
a. a 1% increase in the quantity of hamburgers purchased will lead to a 1.2% increase in the price of fries
b. a 10% increase in the price of a hamburger will lead to a 12% increase in the quantity of fries demanded at a given price.
c. a 1% decrease in the price of a hamburger will lead to a 1.2% increase in the quantity of fries demanded at a given price.
d. a 10% increase in the quantity of hamburgers purchased will lead to a 12% increase in the price of fries.
c
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A person is preparing for a long automobile trip and cashes in a certificate of deposit for cash in case of emergencies along the way. This is an example of the
A) transactions demand for money. B) asset demand for money. C) precautionary demand for money. D) wealth demand for money.
People learn to hold a specific quantity of money for the groceries, theater tickets, gasoline, clothes, film, and other items they habitually purchase. This behavior is representative of the:
a. precautionary demand. b. speculative demand. c. transactions demand. d. volatility demand. e. liquidity demand.