The price elasticity of demand is typically expressed as a positive number because:
A. the demand curve has a positive slope.
B. both the numerator and the denominator are negative, so the formula yields a positive number.
C. price and quantity move in the same direction.
D. it's convenient to use absolute values.
Answer: D
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The figure above shows the cost, demand, and marginal revenue curves for a monopoly. The firm
A) will make an economic profit of $20. B) will charge a price of $10 per unit. C) will produce 20 units per day. D) is a natural monopoly.
Monopoly rights provided by patents are awarded to
a. encourage profit making b. guarantee competitive prices c. encourage competition d. the "first come, first served" e. encourage research and development
If a given unit of money is made of different commodities or different grades of commodity, then according to Gresham's Law, people trade away the best money and hoard inferior money
Indicate whether the statement is true or false
During the Great Depression, many industrial countries tried protecting domestic jobs by raising tariffs. Economic theory would suggest that the result would be
A. increased incomes in the countries that pursued this policy. B. success for only the countries that raised tariffs first. C. success for firms that had a comparative advantage in manufactured goods rather than agricultural goods. D. reduced exports and volume of trade for everyone.