Which of the following is most likely to have inelastic demand?
a. an expensive sports car
b. experimental and unnecessary cosmetic surgery
c. organic fruits and vegetables
d. an effective cancer-fighting drug
Ans: d. an effective cancer-fighting drug
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Assume that your state government has placed a price ceiling of $.20 per kilowatt hour on electricity. The equilibrium price per kilowatt hour for electricity is $.25. The government's action will result in
A) a surplus of electricity in the electricity market. B) an increase in the price of electricity to $.25 per kilowatt hour. C) an increase in producer surplus. D) a deadweight loss.
The steel plow and horse-drawn reaper increased labor productivity on all farms, small and large
Indicate whether the statement is true or false
In perfect competition, technological advances will allow economic profits for
a. all firms. b. only the firm developing the new technology. c. early adopters. d. none of the firms, as the advance will be immediately adopted by all of them.
If the nominal interest rate is 4 percent and expected inflation is 2.5 percent, then what is the expected real interest rate?
a. 1.6 percent b. 10 percent c. 6.5 percent d. 1.5 percent