According to the classical model, prices and wages
A. must be set by government.
B. are flexible.
C. move downward easily, but are "sticky" upward.
D. move upward easily, but are "sticky" downward.
Answer: B
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An increase in cyclical unemployment will result in
A) an increase in structural unemployment. B) an increase in the unemployment rate. C) an increase in the natural rate of unemployment. D) a decrease in frictional unemployment.
The demand curve facing a monopolist: a. is the same as its marginal revenue curve
b. is perfectly elastic. c. is perfectly inelastic. d. is less elastic than a perfectly competitive firm's demand curve.
A profit maximizing monopolist sets output where
A. MC = demand. B. MC = MR. C. MC = P. D. it depends on the average costs in each case.
A 10 percent increase in the price of tablets leads to a 1 percent decrease in the quantity demanded of tablets. The absolute price elasticity of demand for tablets is
A) 9. B) 1. C) 0.1. D) 10.