If the price of textbooks increases by one percent and the quantity demanded falls by one-half percent, then demand for textbooks is:
A. negative.
B. inelastic.
C. unit elastic.
D. elastic.
Answer: B
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Suppose that the equilibrium price and quantity of new houses both increase. Which of the following could be a cause of this change?
A) The wage paid carpenters who build new houses might have risen. B) A technological advance in framing a new house might have occurred. C) The rent for nearby apartments might have fallen. D) More home buyers might have moved into the area. E) The cost of wood framing used to build houses might have fallen.
The greater the number of firms in a colluding oligopoly, the ________ the gain from undercutting the monopoly price and the ________ the potential future loss from a price war.
A. smaller; smaller B. smaller; larger C. larger; larger D. larger; smaller
A price ceiling is non-binding when.
A. it is set above the equilibrium price. B. it is set below the equilibrium price. C. it reduces the output in a market. D. it increases the output in a market.
A collective-action problem is a situation in which:
A. people are often reluctant to voluntarily pay for goods and services that provide benefits for everyone, even for those who don't pay. B. people are reluctant to voluntarily pay for goods and services because they believe their individual contribution will not make a difference. C. a group of people stand to gain from an action that is not rational for any of the members to undertake individually. D. a small group of individuals gains power that sways the decisions of society to their personal gain at the expense of the larger society.