The elasticity of demand for a product is likely to be greater
A) the smaller the number of substitute products available.
B) the smaller the proportion of one's income spent on the product.
C) the larger the number of substitute products available.
D) if the product is an imported good rather than a domestically produced good.
C
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Suppose oil prices fall temporarily, as oil becomes more plentiful. What impact is this likely to have on the production function, the marginal products of labor and capital, labor demand, employment, and the real wage?
What will be an ideal response?
The Framing Gallery frames posters. The Framing Gallery has total fixed costs of $500. The Framing Gallery's average variable cost is $20 and its average total cost is $25. The Framing Gallery is currently framing
A) 5 posters. B) 25 posters. C) 100 posters. D) a number of posters that is indeterminate from this information.
The majority of American's trade deficit with China has been caused by
A. unfair competition. B. excessive spending and inadequate savings in America. C. cheap labor. D. American investment in China.
Suppose twenty neighbors share a park. One of the neighbors, Al, leaves trash in the park. This bothers the other neighbors. According to Coase's Theorem, assigning the property rights to the park to Al
A) will achieve the socially optimal quantity of trash. B) will result in zero trash being dumped in the park. C) might still not achieve the social optimum since coordinating the other nineteen neighbors can be costly. D) is unfair.