If people have more time to adjust to a price change, the price elasticity of demand for that good is likely to
a. increase
b. decrease
c. fall to zero
d. become equal to -1
e. remain unchanged
A
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Starting from long-run equilibrium, an increase in autonomous consumption results in ________ output in the short run and ________ output in the long run.
A. higher; higher B. higher; potential C. lower; higher D. lower; potential
Assume that a multinational company produces components in country A and ships them to a subsidiary in country B. In order to increase its profits
A) the company should charge a high transfer price for the components if income taxes in country B are higher than in country A. B) the company should charge a low transfer price for the components if income taxes in country B are higher than in country A. C) the company should charge a high transfer price for the components if income taxes in country A are higher than in country B. D) None of the above
The most important determinant of the elasticity of supply is
A) whether the good is a durable good or a nondurable good. B) the price of the good. C) the time period firms have to adjust to the new price. D) the proportion of the good in the budget of consumers.
The "capture" in the capture hypothesis occurs because
A) regulators try to promote everyone's best interest. B) society doesn't care for regulatory agencies. C) regulators always know what is in society's best interest. D) regulators usually have been or will be associated with the industries they regulate.