Moving upward along a downward sloping straight-line demand curve, as the price of the product goes up
A. the price elasticity of demand goes from negative to positive.
B. the price elasticity of demand goes from being inelastic to being elastic.
C. the price elasticity of demand goes from being elastic to being inelastic.
D. the price elasticity of demand does not change.
Answer: B
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
The monopolistically competitive firm's economic profits tend toward zero in the long run. Why is this so?
A) Monopolistically competitive firm's are rarely able to maintain the corporate discipline necessary to sustain profits in the long run. B) If a monopolistically competitive firm is profitable for more than 2 years, the Justice Department orders a corporate restructuring to pull the company back to a normal rate of return. C) In the long run, other firms will successfully offer substitutes for the profitable firm's product, and competition will eliminate economic profits. D) Even though the monopolistically competitive firm can successfully maintain barriers to entry, keeping competition at bay becomes very expensive.
Pure capitalism does not focus on private ownership of resources
Indicate whether the statement is true or false
The real wages of workers will tend to be high when
a. industries are automating at a slow rate. b. output per worker is high. c. capital is scarce. d. profits are low.