A recent study found that the price elasticity of demand for apples is -0.4. This year's early freeze in major apple growing regions has led to a 6% decrease in the apple production (supply) compared to last year. What is the implied change in price expected this year for apples (and assume no apple exports or changes in stocks)?
a. Decrease by 3%
b. Decrease by 15%
c. Decrease by 24%
d. Increase by 15%
e. Increase by 24%
d. Increase by 15%
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The individual firm maximizes its total profit by producing the level of output at which the difference between marginal revenue and marginal cost is as large as possible
Indicate whether the statement is true or false
In the IS model, assuming that the real interest rate does not change, an increase in autonomous net exports causes total investment, planned plus unplanned, to ________
A) fall, then rise back to its initial level B) fall, then rise above its initial level C) rise, then fall back to its initial level D) all of the above E) none of the above
International trade on the basis of comparative advantage maximizes world output and allows consumers to access better-quality products at lower prices than would be available in the domestic market alone
a. True b. False Indicate whether the statement is true or false
Which of the following are residents of rich countries likely to have in greater quantities, or better quality, than residents of poor countries?
a. housing b. healthcare c. life expectancy d. All of the above.