If the absolute price elasticity of demand for a product is equal to 1, then
A. the absolute price elasticity of demand is unit-elastic and the percentage change in quantity demanded equals the percentage change in price.
B. the absolute price elasticity of demand is inelastic and consumers are relatively sensitive to price changes.
C. the absolute price elasticity of demand is elastic and consumers are relatively insensitive to price changes.
D. the absolute price elasticity of demand is inelastic and consumers are relatively insensitive to price changes.
Answer: A
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Consider the perfectly competitive firm in the above figure. At the profit maximizing level of output, the firm is
A) incurring an economic loss equal to $119.00. B) incurring an economic loss equal to $123.50. C) incurring an economic loss equal to $187.00. D) making zero economic profit.
Refer to the Article Summary. The pricing method described in the article is referred to as first-degree price discrimination. First-degree price discrimination is also known as
A) perfect price discrimination. B) odd pricing. C) two-part tariff pricing. D) arbitrage.
Which of the following events will increase long-run aggregate supply?
A) an increase in the interest rate B) an increase in resource prices C) a decrease in expected profit D) an advance in technology
Which of the following will cause a reduction in output per worker (Y/N)?
A) a reduction in the capital stock (K) B) a reduction in the saving rate C) a reduction in K/N D) all of the above