Which of the following is FALSE regarding inelastic demand?
A) Price elasticity of demand is less than 1 (Ep < 1).
B) If a firm raises price, total revenues will go up.
C) Price elasticity of demand is greater than 1 (Ep > 1).
D) If a firm lowers price, total revenues will fall.
Answer: C
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If, for a $1000 premium, you buy a $100,000 put option on bond futures with a strike price of 114, and at the expiration date the price is 110, your ________ is ________
A) profit; $4000 B) loss; $4000 C) profit; $3000 D) loss; $3000
"Ceteris paribus" means
A) "invisible hand." B) "other things constant." C) "making all the necessary changes." D) "individual."
The Ahluwalia-Chenery Welfare Index
a. is a method used to measure changes in absolute poverty. b. shows the value judgement implications of using the change in income per capita as a measure of the change in development. c. is a method used to measure changes in inequality. d. is a method used to measure the growth rate of GDP.
Attaining "allocative efficiency" means that:
A. The law of increasing opportunity costs has reached a maximum B. The least costly methods are being used to produce a product C. Resources are being devoted to the production of products most desired by society D. The gap between marginal benefits and marginal costs of the product is biggest