Suppose that a monopolist must choose between two points on its demand curve: it can sell 100 units for $3 each, or it can sell 140 units for $2 each. Which of the following is true?
a. The monopolist is facing elastic demand.
b. The monopolist is facing unit elastic demand.
c. The monopolist is facing inelastic demand.
d. The monopolist is facing perfectly elastic demand.
e. The elasticity of demand cannot be determined with the information given.
C
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If the price of milk increased by 5 percent because of an increase in the demand for milk, and the quantity of milk supplied increased by 7 percent
A) the supply curve of milk has shifted rightward. B) the price elasticity of supply of milk is greater than one. C) milk is more of a luxury than a necessity. D) milk is more of a necessity than a luxury.
How were countries whose industries competed with Chinese industry affected by a yuan that was pegged to the dollar?
A) Because the yuan was undervalued at the pegged exchange rate, the level of Chinese exports remained higher than they would have been if the exchange rate was allowed to float freely. B) Competitors feared that the declining value of the dollar would continue to make Chinese goods more expensive. C) Because the yuan was overvalued at the pegged exchange rate, competing firms from other countries feared that abandoning the peg would lead to an increase in Chinese exports. D) Because China's population is so large relative to other countries, the pegged exchange rate made the goods of foreign competing firms much less expensive than domestic Chinese goods.
If the cost of labor increases, the isocost line will
A) stay the same. B) shift outward in parallel fashion. C) rotate inward around the point where only capital is employed in production. D) shift inward in parallel fashion.
Billionaires get most or all of their income from
A. wages and salaries. B. property. C. government transfer payments.