The cross-elasticity of demand between Homer's Holesome Doughnuts ...

[CharlieWard]

The cross-elasticity of demand between Homer's Holesome Doughnuts and Krusty's Krispy Crullers is 5.0, which indicates that Homer's doughnuts and Krusty's crullers are
 
  A) complements and the relationship between the two goods is strong (that is, the quantity demanded of doughnuts is very responsive to changes in the price of crullers).
  B) complements and the relationship between the two goods is weak (that is, the quantity demanded of doughnuts is not very responsive to changes in the price of crullers).
  C) substitutes and the relationship between the two goods is strong (that is, the quantity demanded of doughnuts is very responsive to changes in the price of crullers).
  D) substitutes and the relationship between the two goods is weak (that is, the quantity demanded of doughnuts is not very responsive to changes in the price of crullers).

Question 2

If the government sector is running a deficit of 120 million and the private sector is running a surplus of 200 million, then net exports equal
 
  A) 80 million surplus.
  B) 320 million surplus.
  C) 80 million deficit.
  D) 320 million deficit.

[medine]

Answer to Question 1

C

Answer to Question 2

A