Compared to the short-run price elasticity of demand, the long-run price elasticity of demand is
A. the same.
B. greater.
C. smaller.
D. either greater than or less, depending on the number of substitutes the good has.
Answer: B
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Which of the following statements about the supply of dollars in the foreign exchange market is true?
A) It is equal to the money supply. B) It represents the demand for U.S. goods and financial assets by firms and households outside the United States. C) It represents the supply of U.S. goods and financial assets by firms and households within the United States. D) It is determined by the willingness of households and firms that own dollars to exchange them for foreign currency.
Refer to Figure 10.7. A movement from point A to point B could be caused by
A) a negative demand shock. B) a decrease in the term premium investors expect in the future. C) an increase in the default-risk premium. D) an increase in the expected rate of inflation.
The optimal level of pollution is:
a. the level at which the marginal social cost of air quality equals the marginal social benefit. b. the level at which the average social cost of air quality equals the average social benefit. c. the level at which the total social cost of air quality equals the total social benefit. d. zero.
When a firm's economic profit is greater than zero, the accounting profit is called normal profit
a. True b. False Indicate whether the statement is true or false