Assume that due to unfavorable conditions in a prime honey-producing area, the price of honey increases by 50 percent. The quantity consumed of herbal tea declines immediately by 25 percent. Everything else held constant, the:
a. cross-price elasticity of demand for herbal tea and honey is negative, and therefore the two goods are substitutes.
b. cross-price elasticity of demand for herbal tea and honey is negative, and therefore the two goods are complements.
c. cross-price elasticity of demand for herbal tea and honey is positive, and therefore the two goods are substitutes.
d. cross-price elasticity of demand for herbal tea and honey is positive, and therefore the two goods are complements.
e. cross-price elasticity of demand cannot be determined from the information provided.
b
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When consumption spending is greater than disposable income, we know with certainty that we have
A) dissaving. B) negative net investment. C) excess thrift. D) positive savings.
Techland's aggregate production function is Y = A × K1/3 × H2/3. Find out the contribution of technology to Techland's GDP if its gross domestic product is $2,000,000, capital stock is 125,000 units and total efficiency units of labor is 1,000,000
What will be an ideal response?