Suppose the company that owns the vending machines on your campus has doubled the price of a can of soda. If they then still sell almost the same number of sodas per day, this suggests:
A. there are few other places to purchase soda on campus.
B. the price elasticity of demand for soda is equal to 1.
C. students do not have good nutritional information.
D. soda purchases represent a large fraction of students' budgets.
Answer: A
You might also like to view...
Barriers to entry
a. prevent monopolies from earning profit in the long run b. prevent monopolies from earning profit in the short run c. may allow monopolies to earn profit in the long run d. prevent government from regulating a monopoly e. prevent a natural monopoly from raising its price
If country A had a smaller underground economy than country B, and country A's citizens worked more hours per week than the citizens of country B, other things equal, then
a. GDP comparisons between the countries would overstate the economic welfare of country A compared to B. b. GDP comparisons between the countries would understate the economic welfare of country A compared to B. c. it is impossible to know which direction GDP comparisons between the countries would be biased as measures of the economic welfare of the two countries. d. it would not introduce any bias in using GDP to compare economic welfare between the countries.
If P = MC for all goods in a free-market economy, then
a. the desire for utility maximization will lead consumers to buy the amount of each good at which MU = MC. b. the desire for profit maximization will lead consumers to buy the amount of each good at which MU = MC. c. the desire for utility maximization will lead consumers to buy only those goods that have low opportunity costs. d. the desire for profit maximization will lead all firms to stop producing in the long run (though possibly not in the short run).
"In economics, the short run commonly refers to a period within one year and the long run is a period longer than one year." Do you agree or disagree? Explain your answer
What will be an ideal response?