Refer to Figure 6-12. The diagram shows two supply curves, SA and SB. As price rises from P0 to P1, which supply curve is more elastic?
A) They are equally inelastic. B) SB
C) They are equally elastic. D) SA
B
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A rent ceiling creates a shortage. As a result, which of the following occurs?
A) only a loss of consumer surplus for tenants B) only a loss of producer surplus for landlords C) a loss of both consumer and producer surplus D) a gain of both consumer and producer surplus
What is meant by the statement that investment projects are irreversible? How does the idea that investment projects are irreversible affect the volatility of investment in capital goods?
What will be an ideal response?
In this graph, at which of the market prices would the firm make short-run economic profits?
a. P1
b. P2
c. P3
d. P4
When demand is unit elastic, a 7 percent change in the price of the good
A. will cause a change in quantity demanded greater than 7 percent. B. will not cause any change in quantity demanded. C. will cause a change in quantity demanded equal to 7 percent. D. will cause a change in quantity demanded of less than 7 percent.