Which of the following examples shows unit elastic demand?
a. When the price of parakeets increases 10 percent, their sales decrease 6 percent.
b. When the price of gold fish increases 10 percent, their sales remain the same.
c. When the price of quarter horses increases 5 percent, their sales decrease 5 percent.
d. When the price of Dalmatians increases 5 percent, their sales decease 100 percent.
c. When the price of quarter horses increases 5 percent, their sales decrease 5 percent.
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Marginal profit is equal to
A) marginal revenue minus marginal cost. B) marginal revenue plus marginal cost. C) marginal cost minus marginal revenue. D) marginal revenue times marginal cost. E) marginal revenue divided by marginal cost.
The rate at which one input can be reduced per additional unit of the other input, while holding output constant, is measured by the
A) marginal rate of substitution. B) marginal rate of technical substitution. C) slope of the isocost curve. D) average product of the input.
When a country follows an inward-oriented strategy, it tends to produce:
a. only tertiary goods. b. goods in which it has an absolute advantage. c. only labor-intensive goods. d. goods for which no export barriers exist. e. goods that replace foreign manufactured products.
If there are big gains to be had from specialization and trade, countries generally don't produce one good because:
A. there is perfectly free trade between national economies. B. national economies often are perfectly free markets. C. specialization is generally limited by trade agreements. D. All of these are true.