« previous next »

Author Question: When the price of one pen is 1, 50 notebooks are demanded. When the price per pen increases to 5, ... (Read 20 times)

jlmhmf

  • Hero Member
  • *****
  • Posts: 552
on: Jun 29, 2018
When the price of one pen is 1, 50 notebooks are demanded. When the price per pen increases to 5, the number of notebooks demanded decreases to 30. What is the cross-price elasticity of demand between the two goods using the arc method?
 
  A) 0.1
  B) -0.375
  C) 3
  D) -3

Question 2

When does a private solution to a negative externality fail to allocate resources efficiently?
 
  What will be an ideal response?


TheDev123

  • Sr. Member
  • ****
  • Posts: 332
Reply #1 on: Jun 29, 2018
Answer to Question 1

B

Answer to Question 2

Private bargaining between the party generating a negative externality and the party suffering from it leads to an efficient allocation of resources. However, such a private solution fails to allocate resources efficiently when the transaction costs associated with bargaining are too high and the number of affected people is large.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

The familiar sounds of your heart are made by the heart's valves as they open and close.

Did you know?

Inotropic therapy does not have a role in the treatment of most heart failure patients. These drugs can make patients feel and function better but usually do not lengthen the predicted length of their lives.

Did you know?

All patients with hyperparathyroidism will develop osteoporosis. The parathyroid glands maintain blood calcium within the normal range. All patients with this disease will continue to lose calcium from their bones every day, and there is no way to prevent the development of osteoporosis as a result.

Did you know?

Though the United States has largely rejected the metric system, it is used for currency, as in 100 pennies = 1 dollar. Previously, the British currency system was used, with measurements such as 12 pence to the shilling, and 20 shillings to the pound.

Did you know?

All adverse reactions are commonly charted in red ink in the patient's record and usually are noted on the front of the chart. Failure to follow correct documentation procedures may result in malpractice lawsuits.

Arctic and alpine cushion plant form and orientation increases heat gain from sunlight and the surro Arctic and alpine cushion plant form and orientation increases heat gain from sunlight and the surro
The mortality rate in the United States increases with age and is lower for women than men at every ... The mortality rate in the United States increases with age and is lower for women than men at every ...
Spirituality increases with age, but there are different patterns for the two genders. Both genders ... Spirituality increases with age, but there are different patterns for the two genders. Both genders ...
The signal voltage from a throttle position increases as the throttle is opened because the wiper ... The signal voltage from a throttle position increases as the throttle is opened because the wiper ...
The population of Asia increases rapidly, the demand for food and water is also growing The population of Asia increases rapidly, the demand for food and water is also growing
An antique painting is purchased in 1980 for $995. The value increases by 3.1% e An antique painting is purchased in 1980 for $995. The value increases by 3.1% e
Video: Helper T cell receptors, activation, proliferation, differentiation & action

For a complete list of videos, visit our video library