A bumper crop of farm products causes:
A. only a slight decline in the price of farm products because the demand for farm products is
income inelastic.
B. a large decline in the price of farm products because the demand for farm products is price
inelastic.
C. only a slight decline in the price of farm products because the demand for farm products is
income elastic.
D. a large decline in the price of farm products because the demand for farm products is price
elastic.
Answer: B
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When the price of toilet paper falls by 20 percent, the quantity of toilet paper demanded rises by 10 percent. Calculate the price elasticity of demand. Is the demand for toilet paper elastic, inelastic, or unit elastic?
What will be an ideal response?
Vickery auctions are
a. Oral auctions b. Second price sealed bid auctions c. English auctions d. None of the above
A star basketball player signs a contract that newspaper reports say is worth $10 million. The player receives $5 million on signing, and $5 million a year for three years. The contract is worth
A. more than $10 million because the present value of $5 million received one or more years from now is more than $5 million. B. less than $10 million since the present value of $5 million received one or more years from now is less than $5 million. C. $10 million as reported in the papers. D. either more or less than $10 million, depending on the value of the discount rate.
Under the collusion model, the outcome in an oligopoly is the same as a monopoly.
Answer the following statement true (T) or false (F)