What happens to the price elasticity of demand moving down along a downward-sloping, linear demand curve?
What will be an ideal response?
Moving down along a downward-sloping, linear demand curve, the elasticity of demand falls in value. Demand changes from elastic to inelastic at the midpoint of the demand curve as the quantity demanded increases moving along demand curve.
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A manager believes there is a 10 percent chance their firm will have to pay $500,000, a 20 percent chance that they will have to pay $400,000 and a 70 percent chance they will be found innocent and pay nothing except the legal fees of $100,000. The manager has been offered a settlement deal of $230,000, which the manager's firm would have to pay the plaintiff. If the manager flips a coin to
decide to enter litigation or to settle, the manager is ________. A) a risk lover B) risk intolerant C) risk neutral D) risk averse
Adam Smith's invisible hand principle stresses
a. that benevolence is a powerful motivator that encourages individuals to engage in productive economic activity. b. the tendency of the competitive market process to direct self-interested individuals into activities that enhance the economic welfare of society. c. the potential of government regulation as a means of bringing the self interest of individuals into harmony with the economic welfare of society. d. the tendency of self-interested individuals to pursue activities that benefit themselves but harm the overall economic welfare of society.
A profit-maximizing price searcher will expand output to the point where
a. total revenue equals total cost. b. marginal revenue equals marginal cost. c. price equals average total cost. d. price equals marginal cost.
A situation in which the Fed's target interest rate has fallen as far as it can fall is sometimes described as a
a. liquidity preference. b. liquidity trap. c. open-market trap. d. interest-rate contraction.