Your company produces and sells Product A, which has an associated elasticity of demand of -1.8. You acquire as a substitute product, B, which has an associated elasticity of demand of -2.0. How should you handle pricing?

a. Raise price on both products with a larger increase on Product A.

b. Raise price on both products with a larger increase on Product B.

c. Reduce price on both products with a larger decrease on Product A.

d. Reduce the price of one product and raise the price on the other.

e. Reduce price on both products with a larger decrease on Product B.

Following an increase in Canadian interest rates relative to US interest rates, which caused Canadian investors to borrow in Europe and to invest in Europe, which of the following would occur?

a. The US dollar would appreciate relative to the Canadian dollar, and Canadian prices would increase.

b. The US dollar would depreciate relative to the Canadian dollar, and Canadian prices would decrease.

c. The US dollar would depreciate relative to the Canadian Dollar, and Canadian prices would increase.

d. The Canadian $ to US$ exchange rate would not be affected, and neither would Canadian prices for US goods.

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