During the winter of 2011-2012, the price of fuel oil increased enormously but the quantity demanded decreased only a little. This response indicates that the demand for fuel oil was
A) inelastic.
B) elastic.
C) unit elastic.
D) perfectly elastic.
E) perfectly inelastic.
A
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What is meant by comparative statics? Assume that a firm wants to set up a factory. It considers four different locations
The rent of the factory space and the time taken to transport the products from each of the locations to the market is shown in the table below. It is also given that the opportunity cost of time is $10 per hour. a) Which is the optimum location? b) If the opportunity cost of time changes to $30 per hour, is there any change in the optimum? Location Time Taken to Transport Products to the Market (hours per month) Rent ($ per month) 1 180 3,000 2 150 3,200 3 100 3,600 4 60 4,100
Refer to the figure above. After the demand curve shifts to D2, if the price is held below the new equilibrium, then:
A) the quantity demanded will equal the quantity supplied. B) the quantity demanded will be greater than the quantity supplied. C) the quantity demanded will be less than the quantity supplied. D) there will be zero deadweight loss.
The price elasticity ofdemand for insulin is:
A. likely to be perfectly inelastic over some range of prices. B. perfectly elastic. C. a large portion of someone's income. D. low relative to the supply.
Economists usually use the term "recession" to refer to:
A. any slowdown in the growth of real GDP. B. zero real GDP growth. C. two or more consecutive quarters of declining real GDP. D. a reduction in nominal GDP lasting more than six months.