A good is said to have a relatively elastic demand if the value of price elasticity is:
A) equal to 0.
B) between 0 and 0.5.
C) between 0.5 and 1.
D) greater than 1.
D
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Efficiency of the median voter model outcome occurs when _____
a. Lindahl pricing is employed. b. a head tax is used to finance the policy c. progressive taxation is used to finance government d. special interests are non-existent
If regulators force a natural monopoly to price as a perfectly competitive firm would, the natural monopolist
A) will earn higher economic profits. B) will earn an economic loss. C) will expand its output. D) will experience a rise in long-term average costs.
Whenever there is a difference in the same exchange rate offered in two markets, an arbitrageur would:
a. wait for the markets to come to equilibrium. b. buy in the market where the currency is offered at the cheaper rate,and simultaneously sell the currency where the rates are higher. c. sell the cheaper-rate currency in the home market. d. not consider the trade, since prices would undoubtedly change before it could be executed.
Using Figure 2 above, suppose that the economy started at PAE2. A potential change that could cause the economy to go from PAE2 to PAE3 might be:
A. exports decrease. B. consumption spending increases. C. investment decreases. D. imports increase.