Suppose that Big-Cat and Fat-Cat are rival cat food brands, and the price of Fat-Cat is reduced. Following this price drop, is there a shortage or a surplus of Big-Cat at the old price of Big-Cat?

If a lower price for good X increases the demand for good Y, the cross elasticity value for the two goods is

A) negative. B) equal to zero. C) positive and less than one. D) positive and greater than one. E) possibly negative, positive, or zero, but there is not enough information to decide.

The increase in tax on state bank notes from 2 to 10 percent provided state banks incentive to

(a) attract more demand deposits and increase the use of checks. (b) increase the amount of state notes and use them to extend bank credit. (c) increase the minting of coins and use them for exchange and lending purposes. (d) all of the above.