Ceteris paribus, for the owner of a sawmill, lumber and the sawdust that go into particle board are
A. Unrelated in the sawmill operator's decision.
B. Substitutes in production.
C. Complements in production; by-products.
D. None of the choices are correct.
Answer: C
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If a competitive price-taker firm is currently producing a level of output at which marginal revenue exceeds marginal cost, then
a. a one-unit increase in output will increase the firm's profit. b. a one-unit decrease in output will increase the firm's profit. c. total revenue exceeds total cost. d. total cost exceeds total revenue.
A tax imposed on the buyers of a good will
a. raise both the price buyers pay and the effective price sellers receive. b. raise the price buyers pay and lower the effective price sellers receive. c. lower the price buyers pay and raise the effective price sellers receive. d. lower both the price buyers pay and the effective price sellers receive.
The demand for good X will be more elastic than the demand for good Y when
A. good X accounts for a larger percentage of a typical consumer's budget than good Y. B. consumers have more time to adjust to a change in the price of good X than they have time to adjust to a change in the price of good Y. C. good X has fewer substitutes than good Y. D. both b and c E. all of the above
If a straight-line demand curve slopes down, price elasticity will:
A. remain the same at all points on the demand curve. B. change between any two points along the demand curve. C. always be greater than one. D. always equal one.