An import ban results in:
A. a decrease in the supply of the product.
B. an increase in the product's price.
C. a decrease in the quantity of the product bought and sold.
D. All of these.
Answer: D
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If a good has many close substitutes, then its demand is most likely
A) elastic. B) inelastic. C) unit elastic. D) perfectly inelastic. E) elastic or inelastic depending on whether the price of the good is increasing or decreasing.
When the price of penicillin tablets increases by $5 per dozen, the drug company's revenue increases by $6 million. Its elasticity of demand (in absolute terms) must be
a. zero. b. greater than one. c. less than one. d. infinitely large.
Which of the following is NOT a function of the interbank part of the foreign exchange market?
A. Provides clearing services for organizations that prefer to use different currencies B. Provides a bank with a continuous stream of information on conditions in the foreign exchange market C. Permits a bank to take on a position in a foreign currency quickly if the bank and its traders want to speculate on exchange-rate movements in the near future D. Provides a bank the means to readjust its own position quickly and at low cost when it separately conducts a large trade with a customer
The law of ________ explains why a marginal revenue product schedule eventually declines.
A. increasing marginal opportunity costs B. diminishing marginal returns C. increasing marginal returns D. diminishing marginal opportunity costs