The quantity of pencils sold is 1000 at the unit price $0.5. Suppose the price elasticity of demand for pencils by the initial value method is 2, and you would like to increase the quantity sold to 1200. Then the new price for pencils must be:
A. $0.05.
B. $0.25.
C. $0.30.
D. $0.45.
Answer: D
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Which of the following is a possible explanation for the fall in prices after an industry is monopolized by combining a group of competitors?
a. A monopolist faces a downward sloping demand curve. Hence, output expansion leads to lower prices. b. A reduction in price increases producer surplus. Hence a monopolist may reduce the price of his product. c. A monopolist may reduce prices to make it difficult for other firms to compete. d. A monopolist can increase profits by reducing price when its cost of production declines due to increased size of the new firm. The fall in price is less than the decline in cost.
When voters pay taxes in proportion to the benefits they receive from government projects
What will be an ideal response?
Most people in LDCs earn their living as _____.
Fill in the blank(s) with the appropriate word(s).
Related to the Economics in Practice on p. 83: The true cost of the Shakespeare in the Park tickets is
A. the cost to put on the performance. B. $0 plus the opportunity cost of the time spent in line. C. zero. D. the additional cost to the city of extra security.