An elastic response in the quantity of a good demanded would be caused by
A. the availability of many substitutes.
B. a lack of sensitivity to the good's price.
C. the good representing a small portion of a person's budget.
D. a lack of substitutes.
Answer: A
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Sue's Surfboards is the sole renter of surfboards on Big Wave Island. Sues demand and marginal revenue curves are illustrated in the figure above. Sue's Surfboards currently rents 15 surfboards an hour. Sue's total revenue from the 15 surfboards is
A) $300. B) $225. C) $150. D) $10.
To increase safety at a bad intersection, the mayor must decide whether to install a traffic light at a cost of $45,000 . If the traffic light reduces the risk of fatality by 0.4 percent, and the value of a human life is estimated to be $10 million, the mayor should
a. install the light because the expected benefit of $400,000 is greater than the cost. b. install the light because the expected benefit of $45,000 is greater than the cost. c. not install the light because the expected benefit of $45,000 is only equal to the cost. d. not install the light because the expected benefit of $40,000 is less than the cost.
Which of the following is not a reason for international trade?
a. Differences in resource endowments b. Diseconomies of Scale c. Differences in tastes d. All of the above are reasons for international trade.
The merger of two community hospitals located in the same geographic market is called:
a. horizontal integration. b. a real shame since one of the hospitals will likely close. c. a leveraged buyout. d. vertical integration. e. a conglomerate merger.