The flatter the demand curve that passes through a given point, the more elastic the demand
a. True
b. False
Indicate whether the statement is true or false
True
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Inflation is a measure of the ________ of prices; the CPI is a measure of the ________ of prices.
A. current level; rate of change in the level B. index; base year's level C. base year's level; index D. rate of change in the level; current level
When the exchange rate is allowed to shift gradually over time, or within an exchange rate band which may also shift over time, this is considered a(n):
A) fixed exchange rate. B) managed float. C) flexible exchange rate. D) none of the above.
Mike wants to open his own repair shop, and is considering using his savings of $30,000 to get it started. He is currently earning 3 percent interest on his savings. His friend Bob calls him and asks to borrow $30,000 to start up a bagel shop; Bob offers to pay him 5 percent interest if he loans him the money. If Mike were to use the money to open his own repair shop, how can he accurately account for his costs?
A. Mike must consider the $900 in forgone interest on his savings as an implicit cost. B. Mike must consider the $1,500 in forgone interest from loaning the money to Bob as an implicit cost. C. Mike must consider the $900 in forgone interest on his savings as an explicit cost. D. Mike must consider the $1,500 in forgone interest from loaning the money to Bob as an explicit cost.
The long-run marginal cost (LMC) is the increase in the cost incurred by the firm when producing one additional unit of output, holding:
A. neither the workforce nor the production facility constant. B. the workforce and the production facility constant. C. the workforce constant. D. the production facility constant.