To increase total revenue, firms with ________ demand should lower price, and firms with ________ demand should increase price.
A. elastic; inelastic
B. unit; inelastic
C. elastic; unit
D. inelastic; elastic
Answer: A
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Suppose that the number of units of good X consumed falls 12 percent when the price of good Y falls 8 percent. The cross price elasticity of demand between goods X and Y is
A) 0.66. B) 1.75. C) 2.0. D) 1.5.
When imports and exports for the same type of good are nearly equal:
a. the laws of comparative advantage break down. b. it is an indication that nearly all the trade is intra-industry. c. exports are probably just "finished" in the nation instead of being fully sourced there. d. there is a very low level of intra-industry trade.
A price-discriminating monopoly
A) sells a larger quantity than it would if it were a single-price monopoly. B) is illegal. C) cannot offer discounts. D) cannot control the price of its product. E) makes a smaller economic profit than it would if it were a single-price monopoly.
Monetary policy has medium-run effects on which of the following?
A) the level of output but not its composition B) both the level and composition of output C) the nominal interest rate D) the real interest rate E) none of the above