The cross-price elasticity of demand is a measure of how much the quantity demanded of one good responds to a change in the price of another good. when the price of a good changes, the quantity demanded of related goods also changes. Two goods are either substitute to each other or they are complement each other. If the price increase in one good (good X) causes consumers to use other good (good Y) in place of this good, we say that these two goods (X and Y) are substitutes for each other. Substitutes are goods that are generally used in place of one another. Concerning the substitute goods, a price increase in good X leads to quantity demanded of good Y to increase. Goods have also complementary relationship. Complements are goods that are typically used together

The law of diminishing marginal utility

The law of diminishing marginal utility applies: as the rate of consumption increases, the total utility will increase at decreasing rate or marginal utility derived from consuming additional units of a good will decline.

The labor market is where firms hire employees to perform different tasks in their organizations. In this market, households supply the labor and firms demand it. The correct answer is B.

Some factors of production cannot be changed in the short run. If the firm decides to upgrade its technology, construct a new building, or expand its machinery and equipment capacity today, it would take quite some time to realize any of these changes. Therefore, a period in which certain inputs cannot be changed is called the short run. These inputs are fixed in the short run. Therefore, they are called fixed inputs. The firm, however, can change certain inputs rather quickly—in the short run— and these inputs are called variable inputs. Labor is a typical variable input. The correct answer is D.

The total revenue of a firm is the price times the quantity sold by the firm.

I.  The lower the interest rate is, the more capital the businesses will demand.  (True)

II. The more capital the companies demand, the lesser the funding it requires to finance. (False, The more capital the companies demand, the greater the funding it requires to finance.)

III. The interest rate goes up, the price (the cost) of the current consumption will also go up. (True)

The answer is D.

Inflation is the increase in the general price level (or overall level of prices) in the economy within a given period of time.

Average Revenue (AR) = Total Revenue (TR)/ quantity (q)

                                 = 168/8
                                 = 21

Therefore, the correct option is C.

The quantities that the producers are willing and able to supply at every given prices are called quantity supplied. The quantity supplied represents the number of units of a good that a firm would be willing and able to offer for sale at a particular price during a given period of time. The correct answer is E. 

Established firms don`t have any specific advantage over new firms. Therefore, the correct option is E. 

Changes in labor supply are caused by several factors. For example, a sudden influx of workers from other areas due to famine, war, unemployment etc. could increase the number of people willing to work at all wages. Figure 8.8 demonstrates how the labor market adjusts. Labor supply curve shifts right, and the resulting excess supply of labor (L2 - L* ) causes the market wage level to drop from w* all the way down to w1 . As a result, the new equilibrium means lower wages (w1 <w* ) for more workers (L1 >L* )

The answer is E.

Average variable cost measures the variable cost per unit of the output produced.

Price floor is a legal minimum on the price at which a good or service can be sold. The correct answer is A.

A natural monopoly occurs when economies of scale are so large that one firm can supply the entire market at a lower average cost than two or more firms.

Economics has two major branches: microeconomics and macroeconomics. Microeconomics is the branch of economics that examines the decision making behavior of the smallest decision-making units such as the individuals, or households and the business firms. Macroeconomics is the branch of economics that examines the aggregate behavior of economic agents and the government on a national scale.

The price elasticity of demand measures the responsiveness of demand to changes in price.

As a social policy, the minimum wage laws are imposed to create a fair minimum wage floor to protect workers in the job market. While the intention of the policymakers is to protect the workers, the imposition of minimum wage laws creates unemployment for especially unskilled labors. The correct anwer is A.

The average product of labor is equal to the division of the total product by the quantity of labor employed. Therefore, the correct option is E.

Expectations: If consumers expect that the price of a certain good will go up in the near future, their current demand curve shifts upwards as they rush to purchase that good before it gets expensive. Number of Buyers: Turkey has experienced a large wave of internal migration during the last couple of decades. Therefore, urbanization rate increased. More people live in urban areas now. These people demanded housing services and the demand for apartments in urban areas shifted upwards. Substitute goods: If two products are substitutes for each other, a change in the price of one product will change the demand for the other product in the opposite direction. For example, if the price of chicken goes down, the demand for beef will shift down to the left. As chicken is a substitute product for beef, a fall in the price of chicken will increase the consumption of chicken and the quantity demanded in the beef market will fall for all possible levels of price. Related goods: All or most of your consumption decisions involve tradeoffs and require making choices among different products. Changes in the prices of certain products definitely influence your purchasing decisions about other products. If meatballs get very expensive, then you will probably switch to pizza, as pizzas are substitutes for meatballs. If prices of CDs/DVDs increase sharply, the demand for CD/DVD players is expected to decline, as CDs/ DVDs and players are complements. Complimentary goods: Two goods are said to be complements if they are generally or necessarily consumed together, such as tea and sugar cubes or printers and ink cartridges. The correct answer is Choice A.