Which of the following is true about increasing cost industries?
a. They use a large portion of available specialized input resources in production
b. In order for industry output to expand, the prices of the specialized inputs will increase.
c. Expansion of industry output leads to a higher equilibrium price in the long run.
d. All of the above are generally true of increasing cost industries.
d
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Suppose the Pleasant Corporation cuts the price of its American Girl dolls by 10 percent, and as a result, the quantity of the dolls sold increases by 25 percent. This indicates that the price elasticity of demand for the dolls over this range is
a. 2.5. b. 0.4. c. 0.5. d. 5. e. inelastic.
Rational ignorance would imply that it is in a voter’s best individual interest to ______.
a. spend time informing others about candidates and their positions b. be fully informed about candidates and their positions c. learn only the basics about candidates and their positions d. prevent others from learning about candidates and their positions
In the market for a particular pair of shoes, Jena is willing to pay $75 for a pair while Jane is willing to pay $85 for a pair. The actual price that each has to pay for a pair of shoes is $65. What is the combined amount of consumer surplus of Jena and
Jane? A. $10 B. $30 C. $130 D. $215
A vertical demand curve for a particular good implies that consumers are
A) sensitive to changes in the price of that good. B) not sensitive to changes in the price of that good. C) irrational. D) not interested in that good.