When the Blue Ocean Surfboard Company lowered the price of surfboards by 20%, it sold 10% more surfboards. The price elasticity of demand for surfboards is:
a. 2
b. 1/2.
c. 1.
d. 20.
b
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Which of the following statements regarding the requirement that a firm be granted a license to operate in a particular market is false?
A) Advocates of licensing maintain that the practice is necessary to maintain quality of service. B) One of the economic effects of a license requirement is to constrain the available supply of the affected good or service. C) The requirement that they be licensed ensures that the affected firms will be able to earn a positive economic profit. D) Relaxing certain licensing requirements should increase the supply of the affected good or service.
Which of the following would be considered an economic function of government?
A) providing a legal system B) promoting competition C) providing public goods D) All of the above are correct.
When the Fed is pursuing expansionary monetary policy it will tend to reduce the demand for the dollar and increase net exports, other things equal
a. True b. False Indicate whether the statement is true or false
The administrative burden of regulating price in a monopolistically competitive market is
a. small due to economies of scale. b. large because price is usually below marginal cost. c. large because of the large number of firms that produce differentiated products. d. small because firms produce with excess capacity.