A vertical demand curve is
A. perfectly inelastic.
B. perfectly elastic.
C. has elasticity of zero.
D. unit elastic.
Answer: A
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Refer to Sales Tax. The portion of the tax revenue ultimately paid by consumers is
a. area A + B + C + D. b. area C + D. c. area C + D + E. d. area A + B + C + D + E.
Suppose a monopolist and a perfectly competitive firm have the same cost curves. The monopolistic firm would:
a. charge a lower price than the perfectly competitive firm. b. charge a higher price than the perfectly competitive firm. c. charge the same price as the perfectly competitive firm. d. refuse to operate in the short run unless an economic profit could be made. e. refuse to operate in the short run if an economic loss was present.
Paper Pushers Inc. hires workers in a competitive labor market. Apart from labor, the company has no other variable inputs. The company's hourly output varies with the number of workers hired, as shown in the table.WorkersPages/hour0014027531054125514061507155 If the price of each page increases, then the demand for workers will
A. remain the same because changes in the output market will not affect the demand for labor. B. decrease because at a higher sales price the firm will not have to produce as much output. C. increase because the value of the marginal product of labor will increase. D. increase because the workers will be motivated to produce more.
Monetarists emphasize
a. crowding-out but not the liquidity trap. b. crowding-out and the liquidity trap. c. the liquidity trap but not crowding-out. d. neither crowding-out nor the liquidity trap.