When the Price of Sausages Is $2

question 264

Multiple Choice

When the price of sausages is $2.00 per pound, consumers buy 50 pounds of hamburger. When the price of sausages rises to $3.00 per pound, 60 pounds of hamburger are purchased. The cross price elasticity of demand between sausages and hamburger is approximately equal to

• A) +0.04.
• B) -0.45.
• C) +2.20.
• D) +0.45.

Recognize how elasticity of resource demand is measured and the factors that affect it.

Differentiate between derived demands for labor and other types of resource demands.

Evaluate the effects of price changes on the demand for labor and other resources, considering the substitution and output effects.

Comprehend the role of marginal revenue product (MRP) and marginal resource cost (MRC) in resource hiring decisions.

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Definitions:

Lumbar Region

The lower part of the spine, consisting of five vertebrae, which plays a key role in supporting the upper body and allowing movement.

Blood Glucose

The sugar that is transported through the bloodstream to supply energy to cells.

Insulin

A hormone produced by the pancreas that regulates blood sugar levels by facilitating the uptake of glucose into tissues and the storage of glucose as glycogen.

Negative Feedback

A feedback process where an initiating factor leads to a reverse response to keep a preferred balance of the entity under regulation.