Other things constant, the price elasticity of demand for a product will be smaller (more inelastic) if:
a. people spend a large share of their income on the product.
b. people spend an insignificant share of their income on the product.
c. the population in the market area is large.
d. there are many good substitutes for the product.
b
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State the law of diminishing returns. How do diminishing returns differ from diseconomies of scale? Be sure to define diseconomies of scale in your answer
What will be an ideal response?
When a country has a current account deficit, the country
A) is borrowing from abroad. B) is lending abroad. C) must have a government budget surplus. D) must have a government budget deficit.
A buyer always wants to:
A. buy for a price that is as high as possible, but never higher than his willingness to pay. B. buy for a price that is as low as possible, but never lower than his willingness to pay. C. buy for a price that is as low as possible, but never higher than his willingness to pay. D. buy for a price that is as high as possible, but never lower than his willingness to pay.
After a $3 per-unit tax on seeing movies in theaters is imposed, attendance falls from 4,000 a week to 3,000 a week. The revenue from the tax is
A) less than $9,000 a week. B) $9,000 a week. C) between $9,000 a week and $12,000 a week. D) some amount that cannot be calculated without more information.