Suppose the cross elasticity of demand for two goods, X and Y, is positive. If the price of Y falls, then quantity demanded will.. O a. Rise for both goods. O b. Rise for X and fall for Y. O c. Remain the same for both goods. O d. Fall for X and rise for Y. O e. Fall for both goods.

If new cars are an elastic good then: O If the price of new cars goes up people will buy more OIf the price of new cars goes up people will buy less If the price of new cars goes down people will buy less No matter what the price demand for new cars remains the same 0耳 0 hp

1. Optimal choice of capital Eleanor makes sweaters in her home. Starting with just some knitting needles and yarn, she was able to knit 60 sweaters per year. Now some local stores have expressed interest in her designs and offered to buy her sweaters for $10 each. This makes it worthwhile for her to invest in some capital; in particular, she could produce many more sweaters if she invested in one or more looms, as shown in the following table. Assume that Eleanor's sweater business is a perfectly competitive firm. Complete the following table by calculating the marginal physical product (MPP) of each loom and the marginal revenue product (MRP) of each loom. Quantity of Input (Looms) Output (Sweaters per year) MPP of Each Loom (Sweaters) MRP of Each Loom (Dollars) 0 1 2 3 4 5 60 110 150 184 213 238 50 40 34 29 25 If the rental price of a loom is $270 per year, Eleanor should use 500 400 340 290 250 Suppose the demand for sweaters is very elastic, while the demand for cigarettes is very…

If goods A and B are substitutes, an increase in the price of A will result in Select one: a. no difference in the quantity sold of either good O b. None of the answers are correct O c. increases the demand for O d. reduces the demand for B