If the price elasticity of supply is equal to infinity and the price was to fall, the quantity supplied would:
A. decrease slightly.
B. fall to zero.
C. not change.
D. increase.
Answer: B
You might also like to view...
During 2005, the tax rate on the top income bracket in the U.S. tax system was _____
a. 28 percent b. 31 percent c. 35 percent d. 39 percent
Suppose that Pat has the legal right to fly an extremely noisy airplane over Chris's apartment and that he values that right at $1,000 per year. Chris would be willing to pay $1,200 per year to avoid the noise. In that case
a. Pat will be required to eliminate the overflight b. Chris will move to a new apartment c. Pat and Chris have a powerful incentive to agree to eliminate the overflight because both would benefit from it d. some governmental agency will step in to require Pat to choose a different flight pattern e. some governmental agency will require Chris to move to a new apartment
Use the aggregate expenditures model and assume the marginal propensity to consume (MPC) is 0.80. An increase in government spending of $1 billion would result in an increase in GDP of:
A. $0.8 billion. B. $1.0 billion. C. $5.0 billion. D. $8.0 billion.
A person buying a used car could ask the seller for permission to take the car to a mechanic for an inspection. If the seller says no, the prospective buyer has gained information about the car. This process is known as:
A. screening. B. internalizing the externality. C. licensing. D. signaling.