If the price elasticity of supply is 1.2, and a price increase led to a 5% increase in quantity supplied, then the price increase is about
a. 0.24%.
b. 4.2%.
c. 6%.
d. 6.2%.
b
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Institutions and laws, such as patent protection, that foster innovations lead to economic growth because they
A) give businesses loans to buy new machinery. B) give confidence to consumers that the products they buy are safe. C) allow the government control of the innovations. D) give confidence to inventors that they will profit from their innovation.
A possible sequence for the three stages of a financial crisis might be ________ leads to ________ leads to ________
A) asset price declines; banking crises; unanticipated decline in price level B) unanticipated decline in price level; banking crises; increase in interest rates C) banking crises; increase in interest rates; unanticipated decline in price level D) banking crises; increase in uncertainty; increase in interest rates
The above figure shows supply and demand curves for milk. If the government passes a law that establishes $3 per month as the legal minimum per gallon price, consumer surplus will be
A) a. B) a + b + f. C) a + b + c. D) c + d + g.
If the law of diminishing marginal productivity holds true, eventually both the marginal cost curve and the average cost curve must become:
A. downward sloping. B. horizontal lines. C. upward sloping. D. vertical lines.