How does the price range affect the elasticity of demand for a product?
(A) Price range has little or no effect on elasticity of demand for a good.
(B) Demand for a good can be elastic at a low price but inelastic at a high price.
(C) Demand for all goods is elastic if the price is low enough.
(D) Demand for a good can be inelastic at a low price, but elastic at a high price.
Ans: (D) Demand for a good can be inelastic at a low price, but elastic at a high price.
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If demand is downward sloping and there is tax on the good, Consumer surplus equals
a. The area between the demand curve and the price, up to the equilibrium quantity. b. Total surplus minus producer surplus. c. Total surplus minus producer surplus and government tax revenue. d. Total surplus minus producer surplus, government tax revenue, and dead-weight loss.
Prisoner's dilemma games imply that cooperative behavior between two people or two firms always breaks down. But reality teaches us that people and firms often cooperate successfully to achieve their goals
Why do the results from prisoner's dilemma games fail to predict real-world results? A) Prisoner's dilemma games do not permit people or firms from reneging on agreements, which often occurs in real-word situations. B) Most real-world situations involve more than two people or firms; the prisoner's dilemma is only applicable to situations that involve two parties. C) The prisoner's dilemma does not apply to most business situations that are repeated over and over. D) Prisoner's dilemma games predict the behavior of people and firms that engage in illegal activity; most people and firms do not resort to illegal activity.
If the price of a good increases, then in the market for the type of labor needed to produce this good,
A. employment will decrease. B. the labor supply will increase. C. the marginal product (MP) of labor will increase. D. the marginal revenue product (MRP) of labor will increase.
Which of the following is always TRUE of rational behavior?
A) It always entails pursuing one's own best interest. B) It always yields the best possible outcome for all individuals. C) It never involves the pursuit of greedy self-interest. D) It never involves taking into account the interests of others.