Suppose the president of a college argues that a 25 percent tuition increase will raise revenues for the college. It can be concluded that the president thinks that demand to attend this college is:
A. elastic.
B. inelastic, but not perfectly inelastic.
C. unitary elastic.
D. perfectly elastic.
Answer: B
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When a firm becomes so large it is difficult to coordinate and control, it is most likely that
A) economies of scale have begun. B) diseconomies of scale have begun. C) average total cost begins to fall. D) long-run average costs become negative. E) there are increasing marginal returns to increasing the firm's plant size.
A curve is plotted with y measured on the vertical axis and x measured on the horizontal axis. The slope of the curve equals
A) y divided by x. B) the change in y divided by x. C) the change in y divided by the change in x. D) y divided by the change in x.
The interest rate falls when either the demand for bonds ________ or the supply of bonds ________
A) increases; increases B) increases; decreases C) decreases; decreases D) decreases; increases
When a tax is imposed on a good, the
a. supply curve for the good always shifts. b. demand curve for the good always shifts. c. amount of the good that buyers are willing to buy at each price always remains unchanged. d. equilibrium quantity of the good always decreases.