Which of the following goods are most likely to have a negative cross-price elasticity,

ceteris paribus?

[1] ECS2601 textbook and the study guide.

[2] ECS2601 textbook and literature textbook.

[3] ice cream and candy in a snack shop.

[4] all the above.

12. Elasticity values...

[1] establish proportion and therefore give perspective to an issue.

[2] eliminate the need for constant specification of units of measurement.

[3] can be calculated by numerous methods.

[4] are described in part by all the above.

13. The income effect of a price decrease...

[1] refers to the influence of real income changes rather than nominal income changes

on consumer purchases.

[2] refers to the influence of nominal income changes rather than real income changes

on consumer purchases.

[3] measures the effect of both real and nominal income changes on consumer

purchases.

[4] does not relate to changes in real or nominal income but rather to the perception of

change in the consumer's mind.

14. If good X consumes a large portion of the budget, a price increase of X...

[1] has a very large substitution effect, because consumers cannot easily absorb the

expense of the price increase and so they substitute.

[2] has a large income effect, because the consumer budget is heavily affected by price

increases in big-ticket items.

[3] has a small substitution effect since large budget items have few substitutes.

[4] has a small income effect, because the income effect is measured with nominal income

constant.

15. Which of the following is not considered as production activity?

[1] A teacher teaching a math class.

[2] A local soccer team playing a game.

[3] A boxer knocking out an opponent.

[4] All the above.