A horizontal demand curve is perfectly elastic because a change in price will induce an infinite change in quantity demanded.
Answer the following statement true (T) or false (F)
True
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Z is a normal good. The equilibrium price and equilibrium quantity of Z in the year 2011 was $25 and 60 units, respectively. In 2014, the equilibrium price of Z had decreased to $15 and the equilibrium quantity had also decreased to 50 units
Other things remaining the same, which of the following could explain this change? A) Shift of the demand curve for Z to the left B) Shift of the demand curve for Z to the right C) Shift of the supply curve of Z to the right D) Shift of the supply curve of Z to the left
Suppose a bank has $100,000 in checking account deposits with no excess reserves and the required reserve ratio is 10 percent. If the Federal Reserve raises the required reserve ratio to 12 percent, then the bank will now have excess reserves of
A) $12,000. B) $0. C) -$2,000. D) -$12,000.
A profit maximizing firm will hire additional workers until
A. the extra cost associated with hiring the last worker equals the price of the good produced. B. the additional cost associated with hiring the last worker equals the average wage rate of the workers. C. the extra revenue generated by the last worker hired equals zero. D. the additional cost associated with hiring the last worker equals the additional revenue generated by that worker.
When comparing price elasticities of demand in the long run to the short run, what can we say about the long-run elasticities?
a. Within every price range, the price elasticity of demand is more elastic. b. Consumers are less sensitive to price changes. c. Consumers are inclined to make fewer adjustments to quantity demanded when price changes d. Within every price range, the price elasticity of demand is less elastic. e. Because consumers had more time to adjust to a price decrease or increase, their reaction to either is much smaller.