Refer to the below graph. Consider a situation where price increases from P3 to P4. In this price range, demand is relatively:
A. Inelastic because the loss in total revenue (areas E + F + G) is greater than the gain in total revenue (area A)
B. Elastic because the loss in total revenue (areas E + F + G) is greater than the gain in total revenue (area A)
C. Elastic because the loss in total revenue (area A) is greater than the gain in total revenue (areas E + F + G)
D. Inelastic because the loss in total revenue (area A) is greater than the gain in total revenue (areas E + F + G)
B. Elastic because the loss in total revenue (areas E + F + G) is greater than the gain in total revenue (area A)
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The reason that the prisoner's dilemma presents a dilemma is that:
A. each player has an incentive to play his or her dominated strategy, but when both choose the dominated strategy each player has a lower payoff than if they both had chosen the dominant strategy. B. the market cannot be in equilibrium because the players do not have dominant strategies. C. neither player has a comparative advantage, so neither can infer what the other player will choose. D. each player has an incentive to play his or her dominant strategy, but when both choose the dominant strategy each player has a lower payoff than if they both had chosen the dominated strategy.
If a graph shows a negative relationship between two variables which then becomes a positive relationship, this curve would
A) always be an upward-sloping line. B) have a minimum point. C) have a maximum point. D) always be a downward-sloping line.
An economy that has interactions in trade or finance with other economies is referred to as
A) a closed economy. B) a net foreign investment economy. C) a trade-balanced economy. D) an open economy.
Which of the following is an example of a production function with fixed proportions?
A) putting orange juice into cartons B) mowing lawns C) cutting hair D) teaching economics