If the elasticity of demand for restaurant meals is 2.27, the demand for restaurant meals is:
A. perfectly inelastic.
B. inelastic.
C. elastic.
D. unit elastic.
Answer: C
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Critically analyze the following and explain whether you agree or disagree: a. Janet knows a lot of people who do not like Marmite®, a yeast extract that is used as a spread on toast
She says that Marmite is so unpopular that Unilever, the company that manufactures Marmite®, cannot possibly have any monopoly power. b. Edgar says that a single firm in the wind power industry is unlikely to have a significant degree of monopoly power for an extended period of time. Since the cost of producing an additional unit of wind energy is so low, a large number of firms can enter the market and compete away economic profits.
The convergence theory predicts that:
A. even if countries differ in their rates of savings, population growth, and other features, they will still converge to the same growth rate, although not the same level of income. B. countries that start out poor should initially grow faster than ones that start out rich, but will eventually slow to the same growth rate. C. poor countries are not generally expected to sustain a high growth rate and surpass the existing rich countries. D. All of these are predicted by the convergence theory.
Which of the following is an example of the life-cycle motive for saving?
A. Pat puts $400 per month in his 401(k) retirement account. B. Chris keeps $15,000 in a money market account to pay expenses in case he loses his job. C. Jordan sets aside $200 per month in case she has to pay for a new roof for her house. D. Gerry and Terry put $2,000,000 in a trust fund that will go to their children when they die.
Suppose you were to hear an economist defend the minimum wage on the grounds that when she estimated the saving rate of minimum wage workers and found it to be much smaller than the savings rate of employers. You would know her to be relying on the ________ argument.
A. work effort B. macroeconomic C. consumer and producer surplus D. elasticity