The cross elasticity of demand for substitute goods must
a. be greater than one
b. be less than one
c. be zero
d. exceed zero
e. be negative
D
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A perfectly competitive market has demand Q = 100 - P and supply Q = P - 10. An individual firm has MC = 10 + 2Q.
(a) What is the market equilibrium price and quantity? (b) How much output should the individual firm produce? (c) Although it is has been claimed that this market is perfectly competitive, do your answers to parts (a) and (b) suggest differently?
The assumption of rational self-interest does not rule out the possibility of concern for other individuals
a. True b. False
If the aggregate supply curve is positively sloped, an increase in the money supply will result in an increase in both equilibrium national income and the equilibrium price level
a. True b. False Indicate whether the statement is true or false
Industry A has a 60 percent concentration ratio, while industry B has a 40 percent concentration ratio. According to the inverted-U theory, all else equal, we can conclude that:
A. industry A will be more technologically progressive than B. B. industry C, with a 10 percent concentration ratio, will be more technologically progressive than either industry A or B. C. industry D, with an 80 percent concentration ratio, will be more technologically progressive than either industry A or B. D. industry A should have a similar amount of R&D spending as industry B, all else equal.