If supply is perfectly elastic, the price elasticity of supply is equal to:
A. 1.
B. 0.
C. infinity.
D. a positive number between 0 and infinity.
Answer: C
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Any cost of negotiating or enforcing a contract is
a. an external cost. b. a private cost. c. a transaction cost. d. a side payment.
Refer to the scenario above. If both nations decide to trade, which of the following statements is true?
A) Hawaii should export both tea and coffee. B) Hawaii should import both tea and coffee. C) Hawaii should export tea and South Carolina should export coffee. D) Hawaii should export coffee and South Carolina should export tea.
Pollution and other negative externalities arise because
a. there are no enforceable property rights to open-access resources b. legislators cannot agree on what to do about them c. they are the price consumers are willing to pay for production of goods and services d. private property rights to pollute are controlled by businesses e. science cannot decide how to control them
Assume that the expectation of a recession next year causes business investments and household consumption to fall, as well as the financing to support it. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the net nonreserve international borrowing/lending balance and the monetary base in the context of the Three-Sector-Model? a. The
net nonreserve international borrowing/lending balance becomes more negative (or less positive) and monetary base falls. b. The net nonreserve international borrowing/lending balance becomes more negative (or less positive) and monetary base rises. c. The net nonreserve international borrowing/lending balance becomes more positive (or less negative) and monetary base falls. d. The net nonreserve international borrowing/lending balance and monetary base remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.