Explain why the shape of the demand curve will determine how a shock to the market equilibrium affects price and quantity
What will be an ideal response?
A flatter demand curve has a smaller slope in absolute value. That means that consumers are more sensitive to price changes. Therefore, a change in price will cause a large reaction in quantity demanded.
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If the monopoly illustrated in the figure above could engage in perfect price discrimination, then each buyer would pay
A) $2.00. B) $3.00. C) $3.50. D) a different price.
Is it possible to see gains in a nation's real standard of living without any positive economic growth?
A) No, a nation's standard of living cannot improve without economic growth. B) Yes, but only if the government prints more money so people feel rich. C) Yes, if workers can produce the same level of output in fewer work hours, so that more leisure time could push up the real standard of living. D) None of the above: Economic growth has nothing to do with a nation's standard of living.
One of the main purposes of the 1947 General Agreement on Tariffs and Trade was to
a. repudiate the most-favored-nation principle. b. encourage bilateral trade agreements between nations. c. promote free trade among nations. d. replace the use of import quotas with tariffs.
Hudson Manufacturing is an MNE based in the United States with operations in Asia. The firm is considering expansion into the European Union. Executives at the firm are debating whether central Europe or Eastern Europe would be best for the firm. Which of the following best supports a decision to establish operations in Eastern Europe?
A) Hudson wants to implement a high-performance work system. B) Hudson plans to staff the foreign facility with local managers. C) Hudson wants to minimize costs by keeping wages low. D) Hudson recently lost money in a joint venture.