Demand is said to have unit elasticity if the price elasticity of demand is
a. less than 1.
b. greater than 1.
c. equal to 1.
d. equal to 0.
c
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A price floor is
A) the highest possible legal price that can be charged for a good or service. B) usually equal to the equilibrium price established before the government imposed the price floor. C) the lowest legal price at which a good or service can be traded. D) a legal price of zero that can be charged for a good or service. E) almost always equal to the price ceiling.
Which of the following is an example of an external benefit?
A) a ton of coal burned in a power plant to produce electricity B) a car accident that crowds a major Los Angeles freeway C) the production of a slice of pizza D) the cleanup of a large lake E) the consumption of a can of Mountain Dew
An increase in government spending would cause which of the following to happen?
A) The aggregate demand curve would shift to the right. B) The aggregate demand curve would shift to the left. C) The aggregate supply curve would shift to the right. D) The aggregate supply curve would shift to the left.
A profit-maximizing firm will hire extra units of a resource when
a. marginal resource cost exceeds marginal revenue product b. marginal resource cost is equal to marginal revenue product c. marginal resource cost is less than marginal revenue product d. temporary resource price differentials exceed the marginal resource cost e. the average resource cost and marginal resource cost curves are equal