The more elastic the supply of a resource,
a. the greater is economic rent as a proportion of total earnings
b. the greater is opportunity cost as a proportion of total earnings
c. the fewer alternative uses the resource has
d. the greater the derived demand for the resource
e. the lower the derived demand for the resource
B
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The quantity of money demanded will increase as interest rates increase
Indicate whether the statement is true or false
Assume there is a surplus in the market for hybrid automobiles. Which of the following statements correctly describes this situation?
A) Some consumers will be unable to obtain hybrid automobiles at the market price and will have an incentive to offer to buy the product at a higher price. B) The supply of hybrid automobiles is greater than the demand for hybrid automobiles. C) the surplus will cause an increase in the equilibrium price of hybrid automobiles. D) The price of hybrid automobiles will fall in response to the surplus; as the price falls the quantity demanded will increase and the quantity supplied will decrease.
In the above figure, if the natural monopoly is regulated and a marginal cost pricing rule is followed, then the consumer surplus will be
A) $192 million. B) $108 million. C) $60 million. D) $48 million.
Suppose the CEO of a major corporation has five subsidiary companies. Only one of these companies is making better than the return on similar investments that the company could be making if it invested its financial capital outside the company
The CEO tells each of these subsidiary companies that the rate of return that they are earning is not acceptable and must rise to the level of these identified companies. He tells them if they can't come up with a plan in twelve months that their companies will be sold. If each of these companies was actually making money can you come up with an economic argument for why it is still rational for this CEO to sell them if they don't abide by his directive.