Which of the following describes a situation in which demand must be inelastic?
a. The price of vitamins rises by 10 cents, and quantity of vitamins demanded falls by 50.
b. The price of vitamins rises by 10 cents, and total revenue rises.
c. A 20 percent increase in the price of vitamins leads to a 20 percent decrease in the quantity of vitamins demanded.
d. Total revenue does not change when the price of vitamins rises.
e. Total revenue decreases when the price of vitamins rises.
B
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Marginal cost pricing regulations for a natural monopolist ensure that
a. b and e b. price reflects the value society places on the last unit produced c. output will continue to grow until the required subsidy is zero d. fair pricing schemes are more profitable e. subsidization will be necessary
Which of the following phenomena shows that risk aversion is the characteristic of many people?
A. The popularity of high-stakes poker tournaments B. Homeowners insurance C. Investing in one stock rather than a portfolio D. Horse-race betting
Note: Amounts in billions.Refer to the above table. The equilibrium real GDP is
A. $14 billion. B. $13 billion. C. $12 billion. D. $15 billion.
Consider a nation in which most workers are unionized. If all the nation's unions band together and succeed in boosting wages established by long-term labor contracts, then
A. there is a leftward shift in just LRAS. B. there is a rightward shift in just SRAS. C. there is a rightward movement along the SRAS curve. D. there is a leftward shift in both LRAS and SRAS.