Suppose that Mimi plays golf 5 times per month when the price is $40 and 4 times per month when the price is $50. What is the price elasticity of Mimi’s demand curve?
a. 0.1
b. 0.8
c. 1.0
d. 10.0
c. 1.0
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If the world terms of trade for a country are somewhere between the domestic cost ratio of H and that of F, then
A) country H but not country F will gain from trade. B) country H and country F will both gain from trade. C) neither country H nor F will gain from trade. D) only the country whose government subsidizes its exports will gain. E) country F but not country H will gain from trade.
Corey is having difficulty deciding between two dishwashers, A and B. As shown in the accompanying diagram, A makes more noise than B, but is cheaper. Ideally, Corey would like a dishwasher that is both quiet and inexpensive.
If Corey behaves like most decision-makers, then the addition of option C would:
A. increase his likelihood of picking B. B. decrease his likelihood of buying a dishwasher. C. increase his likelihood of picking A. D. have no impact on his choice of A and B.
Which of the following equations shows inelastic demand?
a. ED < 1 b. ED >1 c. ED = 1 d. ED x 1
Refer to the above graph of a representative firm in monopolistic competition. What does line 3 represent?
A. Marginal revenue B. Demand C. Average total cost D. Marginal cost