If the absolute value of the price elasticity of demand for gasoline is 0.5, then a 10 percent increase in the price of gasoline leads to a 0.5 percent decrease in the quantity demanded
Indicate whether the statement is true or false
FALSE
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The perfectly competitive model assumes that: a. individual sellers can influence the market price
b. sellers can increase their total revenue by raising prices. c. firms can enter and exit the industry with relative ease. d. firms compete by varying a product's quality rather than a product's price.
Which of the following statements is true of the official classification of money? a. Currency is a component of M1, not M2
b. Traveler's checks is a component of M1, not M2. c. M2 includes demand deposits as well as saving accounts. d. M2 excludes demand deposits and saving accounts.
An internet radio broadcast is
a. excludable and rival in consumption. b. excludable and not rival in consumption. c. not excludable and rival in consumption. d. not excludable and not rival in consumption.
Suppose that monopolistically competitive firms in a certain market are experiencing losses. In the transition from this initial situation to a long-run equilibrium,
a. the number of firms in the market decreases. b. each existing firm experiences a decrease in demand for its product. c. each firm experiences an upward shift of its marginal cost and average total cost curves. d. each existing firm's average total cost falls to bring economic profit back to zero.