When demand is inelastic
A. The percentage change in price is greater than the percentage change in quantity demanded.
B. The product in demand has many substitute goods.
C. Buyers are very sensitive to changes in price.
D. The percentage change in quantity demanded is greater than the percentage change in price.
Answer: A
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If a firm hires its fourth worker for $5 and its fifth worker for $8, then
a. the firm is a monopolist. b. the firm must be substituting capital for labor. c. the fifth worker must have been less productive than the fourth. d. the firm is not maximizing its profit. e. the labor market is not perfectly competitive.
When economic profits are zero, accounting profits
A. must be positive. B. will be negative. C. will equal zero. D. could be positive, negative or zero.
In order to study labor markets more easily, we make which of the following assumptions about firms? (i) Firms sell their products in competitive markets. (ii) Firms buy their inputs in competitive markets. (iii) Firms maximize profits. (iv) Firms maximize revenues
a. (iii) only b. (i) and (iii) only c. (i), (ii), and (iii) only d. (i), (ii), (iii), and (iv)
Assume the economy is at point D. If RGDP demanded decreased to $15 trillion, how would AD2 shift?
a. It would shift to the right of AD2.
b. It would shift to the left of AD2 but remain to the right of AD1.
c. It would shift to the left of AD1.
d. It would not change.