If the price elasticity of demand is equal to zero and the price was to rise, the quantity demanded would:
A. decrease slightly.
B. fall to zero.
C. not change.
D. increase.
Answer: C
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You read online that, at current rates of production, the yearly world supply of food is sufficient to feed the projected 2050 population of earth, but that after 2050 there will be massive starvation. This prediction appears to assume that:
A. the long-run supply of food is perfectly inelastic. B. the long-run supply of food is perfectly elastic. C. the short-run supply of food is perfectly elastic. D. the short-run elasticity of supply of food is greater than long-run elasticity of supply.
Refer to Figure 3-2. An increase in price of inputs would be represented by a movement from
A) A to B. B) B to A. C) S1 to S2. D) S2 to S1.
If short-term government bond rates were indexed
A) such bonds would be a poor hedge against inflation. B) banks and saving and loan institutions would likely lose deposits. C) the government would gain from the implied inflation tax. D) the government would gain from the implied inflation subsidy.
Perfectly competitive markets feature relatively high barriers to entry
a. True b. False Indicate whether the statement is true or false