If the price of a DVD decreases by 50 percent, the quantity demanded increases by 75 percent. The price elasticity of demand is:
A. –1.5 and is inelastic.
B. –1.5 and is elastic.
C. –0.67 and is elastic.
D. –0.67 and is inelastic.
B. –1.5 and is elastic.
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Suppose there are three power-generating plants, each of which has access to 5 different production processes. The table below summarizes the cost of each production process and the corresponding number of tons of smoke emitted each.Process(smoke/day) A(4 tons/day) B(3 tons/day) C(2 tons/day) D(1 ton/day) E(0 tons/day) Cost to Firm X ($/day) $500$514$530$555$585 Cost to Firm Y ($/day) $400$420$445$480 $520Cost to Firm z ($/day) $300$325$360$400 $550Suppose the government decides to impose a tax on each ton of smoke emitted. What would be the lowest tax, in whole dollars, that would reduce emissions to 6 tons per day?
A. $36 per ton B. $21 per ton C. $26 per ton D. $41 per ton
Which statement is true?
A. On the production possibilities frontier, unemployment is zero percent. B. On the production possibilities frontier, 85 percent of the labor force is employed. C. To get out of a recession, we must move to some point closer to the production possibilities frontier. D. To have economic growth, we must have zero unemployment.
One major advantage of limited liability is that it:
A. is not subject to a free-rider problem. B. is not subject to a principal-agent problem. C. shields the personal assets of owners from liability claims. D. has unlimited profit sharing among the firm's owners.
In the case of extraction of a nonrenewable resource, when user costs decrease, then it implies that expected future profits:
A. Decrease, while the amount of current extraction increases B. Decrease, and the amount of current extraction decreases C. Increase, and the amount of current extraction increases D. Increase, while the amount of current extraction decreases