The Measure of the Responsiveness of the Demand for One

question 1

Multiple Choice

The measure of the responsiveness of the demand for one good to the percentage change in the price of the other good is

• A) slope.
• B) price elasticity of supply.
• C) price elasticity of demand.
• D) cross-price elasticity.
• E) income elasticity.

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Definitions:

Unfavorable Balance

A situation where a country imports more than it exports, resulting in a trade deficit.

Balance of Trade

The difference in value between a country's imports and exports over a given period, indicating trade surplus or deficit.

Tariffs

Taxes imposed by a government on imported or exported goods to regulate trade, often used to protect domestic industries from foreign competition.

Merchandise Trade Deficit

The situation that occurs when a country imports more goods than it exports, leading to a negative trade balance.