Comment on the following statement: "Elasticity is constant along a straight-line demand curve"
What will be an ideal response?
The statement is false. While the slope is constant along a straight line, the elasticity is not. In fact, at high prices (the upper area of a demand curve) the demand is elastic. As price falls (and quantity demanded increases), the price elasticity of demand gets smaller (in absolute value).
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Which of the following would cause a rightward shift in the demand curve for gasoline?
I. A large increase in the price of public transportation. II. A large decrease in the price of automobiles. III. A large reduction in the costs of producing gasoline. A) I only B) II only C) I and II only D) II and III only E) I, II, and III
Interest can be defined as
A) the amount of funds loaned to a creditor. B) the participation of a shareholder in the operations of a firm. C) the return paid to owners of capital. D) the return above opportunity cost paid to owners of a firm.
Which of the following was a criterion to participate in the European Monetary Union?
A. The country's budget deficit must be less than 10 percent of the value of its gross domestic product (GDP). B. The gross government debt must be less than 100 percent of its GDP. C. The country's exchange rates must be maintained within the Exchange Rate Mechanism bands with no realignments during at least the previous ten years. D. The country's inflation rate must be less than or equal to 1.5 percentage points above the average inflation rate for the three lowest-inflation EU countries.
Many nations are consistently accused of enjoying the benefits of membership in the United Nations, yet they provide few or no funds to support the organization. This is an example of
A. the negative externality problem. B. the free-rider problem. C. the principle of rival consumption. D. the property rights problem.