A firm lowers the price it charges. The firm's total revenue decreases. What can we conclude about the price elasticity of demand?
A) Demand is elastic.
B) Demand is unit elastic.
C) Demand is inelastic.
D) Demand is perfectly elastic.
E) Not enough information is given to conclude anything about price elasticity of demand.
C
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In order to determine a household's budget line, you must know the
A) prices of the goods bought and the household's income. B) prices of the goods bought, but not the household's income. C) household's income, but not the prices of goods bought. D) household's income, prices of the goods bought, and the household's preferences.
When a paper producer pollutes the air, economists argue that there is
A) efficiency, if production is at its maximum level. B) a positive externality. C) an external cost. D) a cost paid solely by the firm.
When the term "price" is used in the law of demand, price refers to
A. the dollar price of the good. B. the absolute price of the good. C. the nominal price of the good relative to its nominal price in the previous year. D. the price of the good relative to the price of another good.
Keynesian economists believed that economic slowdowns are self-correcting.
Answer the following statement true (T) or false (F)