ECON Midterm 2
d
30) A supply curve shows the relation between the quantity of a good supplied and A) income. Usually a supply curve has negative slope. B) the price of the good. Usually a supply curve has negative slope. C) income. Usually a supply curve has positive slope. D) the price of the good. Usually a supply curve has positive slope.
c
A 10 percent decrease in the price of a Pepsi decreases the demand for a Coca-Cola by 50 percent. The cross elasticity of demand between a Pepsi and Coca-Cola is A) 0.20. B) 10. C) 5. D) 50
b
A 10 percent increase in income increases the quantity of orange juice demanded from 19,200 to 20,800 gallons. The income elasticity of demand for orange juice is A) 1.0. B) 0.8. C) 1.2. D) 0.5.
d
A contest is a good way to allocate scarce resources when A) there is no effective way to distinguish among potential users. B) the decision being made affects a large number of people. C) the lines of responsibility are clear. D) the efforts of the players are hard to monitor directly
a
A cost borne not by the producer but by other people is called ________ cost. A) an external B) an unregulated C) a consumer D) a non-production
d
A minimum wage ________. A) is an effective way of increasing employment B) is a price ceiling in the labor market C) changes the demand for labor. D) is a price floor in the labor market
b
A minimum wage set above the equilibrium wage rate is a price A) floor that results in a shortage of low-skilled labor. B) floor that results in a surplus of low-skilled labor. C) ceiling that results in a shortage of low-skilled labor. D) ceiling that results in a surplus of low-skilled labor
b
A price floor A) always results in a surplus. B) results in a surplus if the floor price is higher than the equilibrium price. C) results in a shortage if the floor price is higher than the equilibrium price. D) always results in a shortage
a
A supply curve that is horizontal reflects a supply that A) is elastic. B) has a zero elasticity. C) is unit elastic. D) is inelastic.
b
A used car was recently priced at $20,000.00. Seeing the car, Bobby thought, "It's nice, but if I have to pay more than $19,500 for this car, then I would rather do without it." After negotiations, Bobby purchased the car for $19,250.00. His consumer surplus was equal to A) $0.00. B) $250.00. C) $19,500.00. D) $1,750.00
c
According to John Rawls, the fair distribution of income is the one that A) makes the average person as well off as possible. B) is based on fair rules. C) makes the poorest person as well off as possible. D) results in equal income for all society members
b
According to Utilitarian principles first discussed in the nineteenth century, fairness implies A) winner takes all. B) equality of income. C) equality of opportunity. D) maximizing consumption
c
Adam makes $25,000 per year and Bob makes $45,000 a year, and they both have the same marginal benefit curve. According to the utilitarian view, if a dollar is transferred from Bob to Adam, then A) the change in Adam's marginal benefit plus the change in Bob's marginal benefit is negative. B) Adam's marginal benefit decreases by more than Bob's marginal benefit increases. C) Adam's marginal benefit increases by more than Bob's marginal benefit decreases. D) the change in Adam's marginal benefit plus the change in Bob's marginal benefit equals zero
c
All of the following statements about marginal benefit are correct EXCEPT the marginal benefit of a good A) is measured as the maximum amount that a person is willing to pay for one more unit of the good. B) decreases as the quantity consumed of the good increases. C) is equal to zero when resource use is efficient. D) is the benefit a person receives from consuming one more unit of the good or service
b
An increase in the demand for computers and a decrease in the number of sellers of computers will definitely ________. A) not change the price of a computer and increase the number of computers bought B) increase the price of a computer C) increase the price of a computer and the number of computers bought D) increase the number of computers bought
a
As Mary's income increases by 20 percent, her demand for tickets to National Hockey League games increases by 10 percent. Mary's demand for tickets is income ________; for Mary, hockey tickets are ________ good. A) inelastic; a normal B) elastic; an inferior C) inelastic; an inferior D) elastic; a normal
a
As income rises, the share of income spent on food in the United States A) falls. B) remains constant at 15 percent. C) rises. D) remains constant at 33 percent.
d
As time passes after a change in the price, the supply of a good or service A) becomes less elastic. B) initially becomes less elastic and then becomes more elastic. C) initially becomes more elastic and then becomes less elastic. D) becomes more elastic.
c
Asian women lag far behind the West in their representation in management level positions. The report by the McKinsley consulting company suggests that there is an opportunity for companies to recruit under-utilized female talent and do well financially as a result. (Source: The Economist, July 7, 2012) The fact that Asian women are currently less likely to be hired as managers is a result of the allocation system using which of the following methods for hiring? A) lottery B) first-come, first-served C) personal characteristics D) auction
c
Bus rides and canned soup are inferior goods, so the ________ elasticity of demand is ________. A) cross; negative B) income; positive C) income; negative D) cross; positive
a
Consumer surplus is the ________ summed over the quantity bought. A) value of a good or service minus the price paid for the good or service B) number of dollars' worth of other goods and services forgone to obtain one more unit of a good or service C) marginal social benefit minus the marginal social cost D) value of a good or service plus the price paid for the good or servic
b
Currently kidneys are allocated based on the needs of each perspective recipient, their blood type, and the urgency of their case. An alternative way to allocate kidneys is to go by the order in which patients were placed on the waiting list. In that case, the allocation of resources is made using A) personal characteristics. B) first-come, first-served. C) market price. D) auction.
c
Currently tire producers must receive a price of $50 per tire to produce 5000 tires. If the supply curve of tires is upward sloping, then to produce one additional tire, tire producers will need to receive a price of A) $0. B) $50. C) more than $50. D) less than $50.
b
Demand is perfectly inelastic when A) shifts in the supply curve results in no change in price. B) shifts of the supply curve result in no change in quantity demanded. C) shifts of the supply curve result in no change in the total revenue from the quantity sold. D) the good in question has perfect substitutes.
c
Demand is price elastic if a A) price increase leads to an increase in the quantity demanded. B) relatively large price increase leads to a relatively small decrease in the quantity demanded. C) relatively small price increase leads to a relatively large decrease in the quantity demanded. D) price increase leads to a decrease in the quantity demanded
b
Duke increased his spending on steak from $7 to $11 per week because of a 12 percent salary increase, so his A) income elasticity of demand for steak is 1.37. B) income elasticity of demand for steak is 3.7. C) price elasticity of demand for steak is 3.7. D) price elasticity of demand for steak is 1.37.
a
Each point on a supply curve represents A) the lowest price for which a supplier can profitably sell another unit. B) the highest price buyers will pay for the good. C) the highest price sellers can get for each unit over time. D) the lowest price buyers will accept per unit of the good.
b
For consumers, goods A and B are complementary goods. The cost of a resource used in the production of A decreases. As a result A) the equilibrium prices of both A and B will fall. B) the equilibrium price of B will rise and the equilibrium price of A will fall. C) the equilibrium prices of both A and B will rise. D) the equilibrium price of B will fall and the equilibrium price of A will rise.
c
Goods and services that can be produced by using commonly available resources that could be allocated to a wide variety of alternative tasks have a supply that is A) unit elastic. B) perfectly inelastic. C) elastic. D) inelastic.
b
If a 1 percent decrease in the price of a pound of oranges results in a smaller percentage decrease in the quantity supplied A) demand is elastic. B) supply is inelastic. C) demand is inelastic. D) supply is elastic.
b
If a 10 percent increase in income results in an 8 percent increase in the quantity demanded of a good, the income elasticity of demand equals ________ and the good is ________ good. A) 1.2; a normal B) 0.80; a normal C) -1.2; an inferior D) 0.80; an inferior
c
If a 20 percent increase in the price of a used car results in a 10 percent decrease in the quantity of used cars demanded, then the price elasticity of demand equals A) 10.0. B) 1.0. C) 0.5. D) 2.0.
d
If a 3 percent increase in the price of tennis shoes leads to a 7 percent increase in the number of tennis shoes supplied A) income elasticity equals 2.33. B) the elasticity of supply equals 0.43. C) supply is inelastic. D) the elasticity of supply equals 2.33
d
If a 6 percent decrease in the price leads to a 5 percent increase in the quantity demanded, the price elasticity of demand is A) 0.60. B) 0.30. C) 1.20. D) 0.83.
c
If a fall in the price of good A increases the quantity demanded of good B A) A and B are substitutes. B) B is a substitute for A, but A is a complement to B. C) A and B are complements. D) A is a substitute for B, but B is a complement to A.
c
If a person will rent an apartment only to married couples over 30 years old, that person is allocating resources using a ________ allocation method. A) command B) market price C) personal characteristics D) first-come, first-served
a
If resources are used efficiently, then ________. A) consumer surplus plus producer surplus is maximized B) marginal social cost is minimized C) consumer surplus equals producer surplus D) producer surplus is maximized
d
If tea and coffee are substitutes, the cross elasticity of coffee with respect to the price of tea will be ________ and an increase in the price of tea will ________ the demand for coffee. A) negative; decrease B) negative; increase C) positive; decrease D) positive; increase
d
If the income elasticity for chocolate chip cookies is 1.84, then chocolate chip cookies are A) an inferior good and income inelastic. B) an inferior good and income elastic. C) a normal good and income inelastic. D) a normal good and income elastic.
a
If the income elasticity of demand for corn is 0.5, then as income increases A) the demand for corn will increase. B) corn will prove to be an inferior good. C) the supply curve of corn will shift leftward. D) the demand for corn will decrease
c
If the price of a movie download falls, the rental rate of DVDs ________ and the equilibrium quantity of DVDs rented ________. A) rises; increases B) rises; decreases C) falls; decreases D) falls; increases
a
If the quantity demanded exceeds the quantity supplied, then there is A) a surplus and the price is above the equilibrium price. B) a surplus and the price is below the equilibrium price. C) a shortage and the price is below the equilibrium price. D) a shortage and the price is above the equilibrium price.
c
If the quantity demanded exceeds the quantity supplied, then there is A) a surplus and the price is above the equilibrium price. B) a surplus and the price is below the equilibrium price. C) a shortage and the price is below the equilibrium price. D) a shortage and the price is above the equilibrium price.
d
If the supply for a good is elastic, that means that when price increases, the A) supply will increase. B) quantity supplied will increase by a smaller percentage than the price increased. C) quantity supplied will decrease. D) quantity supplied will increase by a greater percentage than the price increased
b
Imposing a minimum wage that is above the equilibrium wage rate results in A) equilibrium in the labor market. B) higher job search costs. C) the labor market becoming more efficient. D) lower unemployment.
c
In 2014, the price of peanuts was rising, which lead peanut butter sellers and peanut butter buyers to expect the price of peanut butter would rise in the future. Consequently, in the current market for peanut butter there was ________ which resulted in a ________ in the price of peanut butter and ________ in the quantity of peanut butter. A) a decrease in supply of peanut butter and a decrease in demand for peanut butter; rise, fall, or possibly no change; a decrease B) an increase in supply of peanut butter and a decrease in demand for peanut butter; fall; an increase, decrease or possibly no change C) a decrease in supply of peanut butter and an increase in demand for peanut butter; rise; an increase, decrease or possibly no change D) a decrease in supply of peanut butter and an increase in demand for peanut butter; fall; an increase, decrease or possibly no change
b
In the market for CDs, the producer surplus will decrease if ________. A) the supply of CDs increases B) the price of a CD decreases C) the price of a CD increases D) the marginal cost of a CD decreases
a
In the summer 2012 the lobster catch in Maine was especially large, but instead of celebrating the fisherman were suffering from a lower total revenue. (Source: New York Times, July 28, 2012) As the lobster catch increases, there is A) a movement along the demand curve, resulting in a lower price and an increased quantity. B) a movement along the demand curve, resulting in a higher price and an increased quantity. C) no change in either the price or the quantity. D) a movement along the demand curve, resulting in a higher price and a decreased quantity.
d
In the summer 2012 the lobster catch in Maine was especially large, but instead of celebrating the fisherman were suffering from a lower total revenue. (Source: New York Times, July 28, 2012) We learn from the article that despite the larger quantity of lobster caught, the total revenue of the fisherman decreased. This fact means that the demand for lobster is A) perfectly elastic. B) unit elastic. C) elastic. D) inelastic.
c
Jane is willing to pay $80 for a pair of shoes. The actual price of the shoes is $50. Her marginal benefit is A) $30. B) $1300. C) $80. D) $50.
c
Marginal cost is A) the total opportunity cost of producing all the units of the good. B) the same as the marginal benefit because producers benefit from the money they receive when they sell the good. C) the opportunity cost of producing one more unit. D) zero at the efficient level of production
a
Nick can purchase each milkshake for $2. For the first milkshake purchased Nick is willing to pay $4, for the second milkshake $3, for the third milkshake $2 and for the fourth milkshake $1. What is the value of Nick's consumer surplus for the milkshakes he buys? A) $3 B) $10 C) $9 D) $2
c
Of the following, demand is likely to be the least elastic for A) pink grapefruit. B) diamonds. C) insulin for diabetics D) iceberg lettuce
b
Often people trying to withdraw money from their bank must wait in line, which reflects a ________ allocation method. A) contest B) first-come, first-served C) command D) market price
a
One of the problems associated with the utilitarianism is that it does not recognize that A) taxing those with higher incomes results in less work effort. B) each individual receives a different marginal benefit from a dollar's worth of income. C) similar individuals should be treated the same. D) equity is achieved when there is no poor and no rich
b
Peter's monthly income increases from $1,500 to $1,600. As a result, he increases the number of DVDs he buys per month from 2 to 3. Peter's demand for DVDs is A) income inelastic. B) income elastic. C) price elastic. D) price inelastic.
b
Stefano has just completed an original oil painting. After considering the costs for brushes, paint, canvas, and the value of Stefano's labor time, the marginal cost of the painting is $1,000. Lucky Stefano. One art lover paid him $1,500. How much producer surplus did Stefano obtain? A) The amount of producer surplus cannot be determined from the information given. B) $500 C) $1,500 D) $1,000
d
Supply is elastic if A) the slope of the supply curve is positive. B) a 1 percent change in price leads to a smaller percentage change in quantity supplied. C) the good in question is a normal good. D) a 1 percent change in price leads to a larger percentage change in quantity supplied
d
Suppose tennis shoes cost $50 per pair and firms supply 50,000 pairs of shoes. If the price decreases to $45 and firms decide to supply 48,000, the elasticity of supply equals A) 0.04. B) 2.63. C) 0.0025. D) 0.39
d
Suppose that the equilibrium wage in the low-skilled labor market is $9.25. Further, suppose the federal government raises the minimum wage to $9.00 an hour from its present level of $8.15. The government's action of increasing the minimum wage will result in A) a shortage of low-skilled labor. B) an increase in unemployment. C) a decrease in unemployment. D) neither a shortage nor a surplus of labor in the low-skilled labor market.
c
Suppose the Chinese government regulates the price of food and forbids firms from setting a higher price. In this case the government is setting a A) price floor. B) quota. C) price ceiling. D) tax.
c
Suppose there are four firms that are each willing to sell one unit of a good. Each firm has a different minimum price that they are willing to sell for: Firm A $6, Firm B $7, Firm C $10, and Firm D $12. If the market price is $11 then the market supply for this good will be A) 1 unit. B) 2 units. C) 3 units. D) 4 units.
b
Suppose there are four firms that are each willing to sell one unit of a good. Each firm has a different minimum price that they are willing to sell for: Firm A $6, Firm B $7, Firm C $10, and Firm D $12. If the market price is $11, then the total producer surplus is A) $33. B) $10. C) $9. D) $11
b
The big tradeoff is a tradeoff between A) taxes and subsidies. B) efficiency and fairness. C) price ceilings and price floors. D) consumer surplus and producer surplus
a
The demand for ________ is more elastic than the demand for ________. A) Pepsi; all soft beverages B) food; exotic vacations C) all personal computers; Dell computers D) chewing gum; cars
a
The elasticity of supply does NOT depend on A) the fraction of income spent on the product. B) the time elapsed since the price change. C) resource substitution possibilities. D) none of the above because all of the factors listed affect the elasticity of supply
a
The elasticity of supply measures the sensitivity of A) quantity supplied to a change in price. B) supply to changes in costs. C) price to changes in supply. D) quantity supplied to quantity demanded
d
The elasticity of the momentary supply curve for any good always equals A) zero. B) positive infinity. C) one. D) None of the above answers is correct.
b
The government sets a price floor for corn which is above the equilibrium price of corn. As a result, ________. A) a shortage of corn will be created B) a deadweight loss will be created C) the corn market will be efficient D) none of the above answers is correct
d
The income elasticity of demand is A) negative for a normal good and positive for an inferior good. B) always negative. C) always positive. D) positive for a normal good and negative for an inferior good.
c
The income elasticity of demand is the percentage change in ________ divided by the percentage change in ________. A) the price; income B) income; the price C) the quantity demanded; income D) income; the quantity demanded
a
The marginal social benefit curve for a product can be the same as the good's A) demand curve. B) consumer surplus curve. C) supply curve. D) marginal cost curve
d
The market supply curve shows the A) maximum price suppliers must receive in order to produce another unit of the good. B) profit that suppliers receive from producing another unit of the good. C) amount of producer surplus suppliers receive. D) minimum price suppliers must receive in order to produce another unit of the good
b
The night before enrollment was to open for the University of Johannesburg a line of people more than a mile long formed outside the gates. When the gates opened, a stampede started, and a woman lost her life in her attempt to secure her son a spot at the university and a chance for a better life. (Source: New York Times, January 10, 2012) Based on the news clip above, the allocation of resources in made using A) market price. B) first-come, first-served. C) auction. D) lottery.
c
The price elasticity of demand for corn is 0.4. A new hybrid of corn is discovered and all farmers start to use it, which increases the quantity of corn they can produce from each acre. What happens to the farmers' total revenue? A) The total revenue will not change. B) The total revenue will increase. C) The total revenue will decrease. D) There is not enough information to determine what happens to the total revenue.
c
The price elasticity of demand for oil is estimated at 0.05. This value means a 10 percent increase in the A) price of oil will increase the quantity of oil demanded by 0.5 percent. B) quantity of oil demanded will result from a 0.5 percent increase in the price of oil. C) price of oil will decrease the quantity of oil demanded by 0.5 percent. D) quantity of oil demanded will result from a 0.5 percent decrease in the price of oil.
b
The producer surplus from a good is equal to the A) actual price of the good minus the maximum amount a consumer is willing to pay for the good. B) price of the good minus its opportunity cost of production summed over the quantity sold. C) opportunity cost of producing the good minus its price summed over the quantity sold. D) maximum amount a consumer is willing to pay for the good minus the price that actually must be paid summed over the quantity sold.
c
The quantity of CDs that firms plan to sell this month depends on all of the following EXCEPT the.... A) wage rate of workers who produce CDs. B) number of producers of CDs. C) quantity of CDs that people plan to buy. D) price of a CD.
c
The taxicab fare in Newville is regulated. The fare currently charged is $6 a ride. Newville taxicab drivers want to obtain government's permission to lower the fare, which they think will increase their total revenue. From this we can conclude that the drivers believe that the demand for taxicab rides is A) inelastic. B) unit elastic. C) elastic. D) perfectly inelastic
a
Ticket scalpers at the NCAA basketball tournament last year charged prices high above the printed ticket price. This observation is evidence of A) a shortage at printed ticket prices. B) the tournament not being televised. C) the tournament getting too much television exposure. D) a surplus at printed ticket prices.
b
Total revenue for skis is at a maximum when the price elasticity of demand is A) 0. B) 1. C) between 0 and 1. D) greater than 1.
b
Unit elastic demand means that the A) ratio of a change in the quantity demanded to a change in the price equals 1. B) ratio of a percentage change in the quantity demanded to a percentage change in the price equals 1. C) demand curve is horizontal. D) demand curve is vertical.
d
Using the "It's not fair if the result isn't fair" principle of fairness, an income tax designed to transfer wealth from the rich to the poor A) increases efficiency and does not affect equity. B) decreases efficiency and equity. C) increases efficiency and equity. D) decreases efficiency and increases equity
d
Utilitarianism argues that A) There is a tradeoff between equality and efficiency. B) The competitive market is fair. C) The result is fair if the rules are fair. D) Only equality brings efficiency
a
Utilitarianism is a principle whose goal is ________. A) the greatest happiness for the greatest number B) equal happiness for all workers C) equal pay for equal work D) the greatest pay for the greatest number
b
Utilitarianism is the idea that only A) competition brings efficiency. B) income equality is fair. C) efficiency is fair. D) efficiency brings equality
c
What will happen to the equilibrium price and equilibrium quantity of ice cream cones when consumers' incomes decrease? A) If ice cream cones are an inferior good, then the equilibrium price for an ice cream cone will increase and the equilibrium quantity of ice cream cones will decrease. B) If ice cream cones are an inferior good, then the equilibrium price and quantity of ice cream cones will decrease. C) If ice cream cones are a normal good, then the equilibrium price and quantity of ice cream cones will decrease. D) If ice cream cones are a normal good, then the equilibrium price and equilibrium quantity of ice cream cones will increase.
b
When a minimum wage is set above the equilibrium wage rate, ________. A) the supply of low-skilled workers increases and the supply curve shifts leftward B) unemployment increases C) the supply of low-skilled workers decreases and the supply curve shifts rightward D) search activity decreases
c
When a rent ceiling is imposed in a housing market, the opportunity cost of housing equals the A) consumer surplus. B) market equilibrium rent that would prevail in the absence of a rent ceiling. C) value of the time and resources spent searching plus the rent. D) rent.
c
When consumers' incomes increased 10 percent, the quantity of milk bought increased 5 percent. This result means A) milk is a luxury. B) milk is an inferior good. C) milk is a necessity. D) the demand for milk is income elastic.
b
When scarce resources can serve only one user at a time in sequence, which method works well for allocating the scarce resources? A) contest B) first come, first served C) lottery D) command system
d
When the Smiths were shopping for their present home, the asking price from the previous owner was $250,000.00. The Smiths had decided they would pay no more than $245,000.00 for the house. After negotiations, the Smiths actually purchased the house for $239,000.00. Therefore, the previous owner earned a producer surplus of A) $250,000.00. B) $5,000.00. C) $11,000.00. D) an amount unknown given the information in the question.
d
When the price of milk goes up as a result of a rightward shift of the demand curve for milk, the total revenue collected by milk producers will A) decrease only if milk is elastic in supply. B) increase only if milk is inelastic in supply. C) remain constant only if milk has a unitary price elasticity of supply. D) none of the above
c
When the price of perfume changes from $24 to $26, the quantity supplied increases from 100 jars to 150 jars. What is the elasticity of supply of perfume? A) 25.0 B) 0.2 C) 5.0 D) 0.04
d
When there is a shortage in the market, the quantity sold is A) less than the quantity bought. B) less than the quantity supplied. C) greater than the quantity supplied. D) equal to the quantity supplied.
d
Which of the following arguments support the proposition that society should accept at least some income inequality? A) Administrative costs associated with income redistribution imply that low-income people receive less than $1 for each dollar taken from high-income people. B) Income redistribution will require taxation, causing inefficiently low levels of labor supply and saving, thus decreasing the size of the economic pie. C) Income redistribution programs divert skilled labor and capital to tax compliance activities and away from production of goods and services that people value. D) All of the above answers are correct because all support the proposition that society should accept some income inequality
d
Which of the following goods has a perfectly inelastic supply? A) compact discs by Bush B) insulin C) Diet Pepsi D) the original portrait of "Whistler's Mother"
c
Which of the following is TRUE? A) A command system works well when the range of activities to be monitored is large and complex. B) When a manager offers everyone in the company the opportunity to win a prize, resources are allocated by a lottery. C) When a market price allocates resources, all people who are willing and able to pay that price get the resource. D) When the government decides how to allocate tax dollars among competing uses, resources are allocated by market prices
d
Which of the following is TRUE? A) Force has never played an important role in allocating scarce resources. B) A market price always allocates resources better than a command system. C) Lotteries work best when a resource can serve just one user at a time in a sequence. D) In the United States, how tax dollars are allocated among competing uses is an example of how resources are allocated by majority rule.
d
Which of the following is TRUE? A) When a market price allocates resources, everyone who is able to pay the price gets the resource. B) When the government decides how to allocate tax dollars among competing uses, resources are allocated by command. C) When a manager offers everyone in the company the opportunity to win a prize, resources are allocated by a market price. D) A command system works well when the lines of authority and responsibility are clear.
b
Which of the following is a result of a rent ceiling set below the equilibrium rent? I. equity in the housing market II. efficient allocation of resources III. a shortage of housing units A). I and II B). III only C). II only D). I and III only
d
Which of the following leads a good to have a high elasticity of supply? I. The good must be produced using unique resources. II. The good is produced using commonly available resources. A) I only B) I and II C) neither I nor II D) II only
c
Which of the following raises the price of a used car and increases the equilibrium quantity sold? A) a special rebate program on all new cars B) an increase in wages for used car salespeople C) a new 8 percent federal excise tax placed on all new car purchases D) None of the above answers is correct
d
You are the new vice president in charge of advertising at Taco Bell. In your upcoming advertising campaign, you plan to degrade the fast food competitor whose product is the closest substitute for Taco Bell's tacos. That would be the fast food chain whose cross elasticity of demand with your tacos is equal to A) negative 2.11. B) negative 1.75 C) positive 1.00 D) positive 1.55
