Which of the following best describes a good with perfectly elastic demand?
A) For a given price change, the percentage change in quantity demanded will be less than the percentage change in its price.
B) The demand curve for the good initially slopes upward, reaches its maximum, and then slopes downward.
C) Even the smallest increase in the price of the good will cause consumers to stop consuming it completely.
D) The quantity demanded of the good is completely unaffected by a price change.
C
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As more labor is hired, moving along the production function, diminishing returns occur because
A) workers are overworked and so their productivity decreases. B) the wage rate paid is too low and so workers decrease their work effort. C) there are fixed quantities of other resources. D) the real wage rate must increase in order to hire additional workers. E) real GDP increases more rapidly the more workers are hired.
The classical and Monetarist models agree that
a. the use of fiscal policy can stabilize output. b. money demand is inherently unstable. c. the public has perfect information about the price level. d. increases in the money supply are the primary cause of inflation. e. none of the above
Which of the following is the clearest evidence of employment discrimination against minority employees?
a. The mean number of years of schooling of minority workers is lower than that of whites. b. The average hours worked by minority employees exceeds the hours worked by whites. c. The average wages of minority workers are lower than the average wages of whites. d. The average wages of minority employees are lower than the average wages of whites with similar productivity characteristics.
Use the above figure. If a commission regulates the above monopoly using fair-return (average cost pricing), then the industry's output will be ________ and the product's price will be ________
A) Q1; P1 B) Q2; P3 C) Q3; P2 D) Q4; P1