Author Question: If the cross price elasticity of demand for tacos with respect to burritos equals +2.5, then: a. a ... (Read 97 times)

ap345 · **on:** Jun 30, 2018

If the cross price elasticity of demand for tacos with respect to burritos equals +2.5, then:
a. a 1 increase in the quantity of burritos purchased will lead to a 2.5 increase in the price of a taco.
b. a 10 increase in the price of a burrito will lead to a 25 increase in the quantity of tacos demanded at a given price.
c. a 1 decrease in the price of a burrito will lead to a 2.5 increase in the quantity of tacos demanded at a given price.
d. a 1 increase in the quantity of tacos purchased will lead to a 2.5 increase in the price of a burrito.

Question 2

According to the growth version of the quantiy theory of money, the growth rate of the money supply equals the inflation rate plus the growth rate of real output.
a. True
b. False
Indicate whether the statement is true or false