Suppose that in a month the price of a liter of soda increases from $1 to $1.50. At the same time, the quantity of liters of soda supplied increases from 200 to 210. The price elasticity of supply for liters of soda (calculated using the initial value formula) is:
A. negative.
B. inelastic.
C. unit elastic.
D. elastic.
Answer: B
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The economy is undergoing a recession that has reduced consumers' incomes. In the computer chip market, this will lead to
A) an increase in price and a decrease in quantity. B) an increase in price and an increase in quantity. C) a decrease in price and a decrease in quantity. D) a decrease in price and an increase in quantity.
Which of the following is an example of an activity that creates a positive externality?
a. an iron smelting factory emits sulfur dioxide into the air b. the owner of a steamboat company dredges a river in order to improve navigation c. a group of investors starts a business specializing in transporting goods via clipper ship d. flatboat operators purchase steamboat tickets in order to return to their homes upstream
If a firm is earning zero economic profit, then its accounting profit will:
A. decrease in the long run. B. increase in the long run. C. be positive. D. be negative.
The output of cell phones can be added to the output of refrigerators in order to compute GDP by:
A.) Multiplying the output of each by the corresponding prices and adding these dollar values. B.) Dividing the output of each by price and adding these dollar values. C.) Adding up the physical number of cell phones and refrigerators produced. D.) Dividing dollar values of output for each by price and adding the results.