Suppose you observe that minor changes in supply seem to cause dramatic changes in price. You would conclude that
a. demand is unit elastic
b. demand is elastic
c. demand is inelastic
d. demand is perfectly inelastic
Answer: c. demand is inelastic
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There are two people in an economy. Person A’s demand for a public good is Q = 10 - P and person B’s demand is Q = 20 - 2P. The highest total that A and B will be willing to pay for six units of the public good is
a. $3 b. $4 c. $7 d. $11
A natural monopoly is a market where
a. a single firm has control over a vital natural resource. b. many smaller firms can produce the entire market output at the same per-unit cost as could one large firm. c. a single large firm can produce the entire market output at a lower per-unit cost than a group of smaller firms. d. many smaller firms can produce the entire market output at a lower per-unit cost than could one large firm.
Inflation is a measure of the ________ of prices; the CPI is a measure of the ________ of prices.
A. current level; rate of change in the level B. base year's level; index C. rate of change in the level; current level D. index; base year's level
If you believe that all workers should be paid the same, you believe in the
A) egalitarian principle. B) productivity standard. C) benefits standard. D) comparative worth principle.