Each of the following is an example of capital, except
A. an office building.
B. gold.
C. an assembly line.
D. a computer system.
B. gold.
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The price elasticity of supply of hot dog buns is estimated to be 1.5. Holding everything else constant, this means that a 10 percent decrease in the price of hot dog buns will cause the quantity of hot dog buns supplied to decrease by
A) approximately 25 percent. B) 1.5 percent. C) approximately 5 percent. D) 15 percent.
Suppose that government imposes a specific excise tax on product X of $2 per unit and that the price elasticity of demand for X is unitary (coefficient = 1). If the incidence of the tax is such that consumers pay $1.80 of the tax and the producers pay
$.20, we can conclude that the: A. supply of X is highly inelastic. B. supply of X is highly elastic. C. demand for X is highly inelastic. D. demand for X is highly elastic.
If scarcity was eliminated
A. all nations would have an absolute advantage in producing all products. B. the concept of trade-offs would become irrelevant. C. trade would become unnecessary. D. opportunity costs would increase.
The colluding oligopoly will face market demand and produce up until the point at which
A. marginal revenue and marginal cost are equal and price will be set above marginal cost. B. marginal revenue and marginal cost are equal and price will be set below marginal cost. C. price and marginal revenue are equal and price will be set below marginal cost. D. price and marginal cost are equal and price will be set equal to marginal cost.