A downward-sloping demand curve illustrates
a. that demand decreases over time.
b. that prices fall over time.
c. the relationship between income and quantity demanded.
d. the law of demand.
d
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An increase in license fees -- a long run recurring fixed cost -- will lead to a drop in the number of firms competing in a competitive industry.
Answer the following statement true (T) or false (F)
When mark-up equals 50% and AC = MC, then demand elasticity will be
A) -1. B) -1.5. C) -2. D) -3.
In the presence of heteroskedasticity, and assuming that the usual least squares assumptions hold, the OLS estimator is
A) efficient. B) BLUE. C) unbiased and consistent. D) unbiased but not consistent.
In the classical model, an increase in aggregate demand will lead to an increase in wage rates while a decrease in aggregate demand will
A. leave wages unchanged since workers will not take a cut in pay. B. increase wages since business will be desperate for labor. C. decrease wages. D. change the price of capital.