Answer the following questions true (T) or false (F)
1. If, when price changes by 35 percent, the quantity demanded changes by 7 percent, then the absolute value of the price elasticity of demand is 5.
2. Suppose at a price of $50, Yoshi's Jazz Bar sells 20 tickets to its nightly jazz performance and at a price of $40, it sells 25 tickets. Based on this information, the demand for Yoshi's jazz performance is elastic.
3. If demand is inelastic, the absolute value of the price elasticity coefficient is greater than one.
1. FALSE
2. FALSE
3. FALSE
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Arbitrage works to create a general equilibrium of exchange rates in the foreign exchange market
Indicate whether the statement is true or false
Two firms, Acme and FirmCo, have access to five production processes, each of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the table below. Process(smoke/day) A(10 tons/day) B(8 tons/day) C(6 tons/day) D(4 ton/day) E(2 tons/day) Cost to Acme ($/day) $750$800$1,000$1,400$2,000 Cost to FirmCo ($/day) $500$750$1,200$2,200 $4,000 Suppose the firms are both currently using process A. If the government imposes a tax of $110 per ton of smoke emitted, then Acme will use process ________, and FirmCo will use process ________.
A. C; A B. C; C C. B; A D. D; C
Normative economic principles are concerned with how people ________ make decisions while positive economic principles are concerned with how people ________ make decisions.
A. do; should B. in ordinary life; in power C. in power; in ordinary life D. should; do
If consumption spending is larger than disposable income,
A. saving is positive. B. dissaving occurs. C. saving is exactly zero. D. a depression results.