If the price of hand calculators falls from $10 to $9 and, as a result, the quantity demanded increases from 100 to 125, then:
A. demand is elastic.
B. demand is inelastic.
C. demand is of unit elasticity.
D. not enough information is given to make a statement about elasticity.
Answer: A
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Your neighbors have offered to pay you to look after their dog while they are on vacation. It will take you one hour per day to feed, walk, and care for the dog, which you can do either before or after you go to work. Your regular job pays $10 per hour, and you can work up to eight hours per day. The smallest amount of money you would accept to look after your neighbor's dog is equal to:
A. $15 per day, because overtime wages are generally 1.5 times your regular wage when you work more than eight hours a day. B. the value of one hour of leisure, which is greater than zero. C. zero, because your regular job is not available for more than eight hours per day. D. $10 per day, because that is your opportunity cost of one hour of work.
If firms in a monopolistically competitive industry are making profits in the short run
A) some firms will ultimately exit the industry. B) barriers to entry will be erected to keep out rivals. C) new firms will enter the market. D) they will resort to advertising wars to help sustain these profits.
Which of the following are considered factors of production? I. Land II. Labor III. Physical capital IV. Entrepreneurship
A) I and II only B) I and III only C) I, II and III only D) I, II, III and IV
If equilibrium price falls and the equilibrium quantity of the good purchased decreases, what has happened to either the supply curve or to the demand curve?
A) Supply increased. B) Demand decreased. C) Demand increased. D) Supply decreased.