Price elasticity of demand and price elasticity of supply are both influenced by
a. the availability of close substitutes for the product
b. the proportion of the consumer's budget spend on the product
c. the length of the adjustment period considered
d. technological conditions such as the additional costs of increasing production
e. none of the above
C
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An increase in the value of the U.S. dollar will
A) reduce Canadian demand for winter homes in Arizona. B) increase Canadian demand for winter homes in Arizona. C) reduce the cost of homes in Arizona for Canadian buyers. D) increase the cost of homes in Arizona for American buyers.
When the marginal cost curve is below the average total cost curve, the average total cost curve must be falling.
Answer the following statement true (T) or false (F)
Adam has 3 apples and 3 oranges. Eve has 2 apples and 2 oranges. The marginal utilities for Adam and Eve are summarized in the above table. Adam asks Eve to exchange one of her apples for an orange.
A. Eve will be willing to make the exchange, because her total satisfaction will remain unchanged. B. Eve will be unwilling to make the exchange, because she loses 15 utils of satisfaction. C. Eve will be unwilling to make the exchange, because she loses 5 utils of satisfaction. D. Eve will be willing to make the exchange, because her total satisfaction will increase.
If an exhaustible resource is priced at marginal cost that remains constant over time, then
A) all owners of that resource earn rent. B) the price will stay constant over time. C) the percent price increase each year equals the rate of interest. D) the good is relatively scarce.