Refer to the total revenue graph below. An increase in the quantity of product X demanded from 14,000 to 16,000 units implies that the price of product X was:
A. Reduced and the demand is elastic
B. Increased and the demand is elastic
C. Reduced and the demand is inelastic
D. Increased and the demand is inelastic
C. Reduced and the demand is inelastic
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Assume that we are concerned about the existence of one firm (monopoly) in a market because of the potential for economic profits. If, however, there is free entry and exit, should our concerns change? Why or why not?
What will be an ideal response?
For any given tax, the revenue generated is:
A. larger in markets with price-elastic demand and supply. B. the same regardless of price elasticity. C. always maximized in markets with price-elastic demand and supply. D. smaller in markets with price-elastic demand and supply.
According to new Keynesian economics:
a. the aggregate supply curve is horizontal at relatively low levels of real GDP and becomes negatively sloped, as more and more industries reach their full capacity level of output. b. the aggregate supply curve is negatively sloped at relatively low levels of real GDP and becomes horizontal, as more and more industries reach their full capacity level of output. c. the aggregate supply curve is horizontal at relatively low levels of real GDP and becomes positively sloped, as more and more industries reach their full capacity level of output. d. the aggregate supply curve is positively sloped at relatively low levels of real GDP and becomes horizontal, as more and more industries reach their full capacity level of output. e. the aggregate supply curve is positively sloped at relatively low levels of real GDP and becomes negatively sloped, as more and more industries reach their full capacity level of output.
The exchange-rate effect helps explain what feature in the aggregate demand and aggregate supply model?