Other things constant, which case would tend to reflect the highest elasticity of demand for eggs?
A) A restaurant that spends 1% of their budget on eggs
B) A restaurant that spends 2% of their budget on eggs
C) A restaurant that spends 5% of their budget on eggs
D) The question can't be answered without information on the price of eggs.
C
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Figure 5-11
In Figure 5-11, a consumer is initially at point A. There is a price change and she moves to B. It follows that
A. the demand for beer follows the law of demand. B. the demand for beer does not follow the law of demand. C. wine is an inferior good. D. the consumer is confused.
A firm's marginal factor cost describes
A) the increase in the firm's total revenue as one more unit of output is sold. B) the change in total fixed cost that results from hiring one more unit of input. C) the change in total variable cost that results from the production of an extra unit of output. D) the change in total cost that results from using one more unit of an input.
Dynamic pricing used by companies such as Uber:
A. allows market prices to adjust in real time to changes in supply and demand. B. creates market prices that are consistently lower than those preset by firms or by law. C. has been declared illegal because it harms consumers. D. often results in shortages of desired products.
Answer the following statements true (T) or false (F)
1. Economic rent is the payment made to a resource which has a perfectly inelastic demand curve. 2. Reducing the payment of rent to land-owners will decrease the quantity of land supplied. 3. As viewed by society, economic rent is not a cost but rather a surplus payment. 4. The demand side, not supply, is the major factor determining how high land's rent will be. 5. Money is an economic resource referred to as capital.