Why do economists use the concept of elasticity in addition to measurement of the slope of the demand curve?
a. Mathematical equations are favored over graphical analysis.
b. Elasticities are independent of the units of measure.
c. The concept of elasticity can be used in other areas of economics, whereas the slope of the demand curve is only useful in demand analysis.
d. These terms are interchangeable, but elasticity has the more professional sound.
B
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Suppose a single-price monopoly sells 3 units of a good at $20 per unit. If the monopoly sells 4 units, the total revenue increases to $72. What is the marginal revenue of the fourth unit?
A) $52 B) $18 C) $60 D) $12 E) $20
If the good in the above figure is a normal good and income rises, then the new equilibrium quantity
A) is less than 300 units. B) is 300 units. C) is more than 300 units. D) could be less than, equal to, or more than 300 units.
Government payment of a per-unit subsidy for health care services causes
A. a reduction in the price that health care service providers receive for each unit of care provided. B. an increase in the quantity of health care services demanded above the quantity demanded in the absence of the subsidy. C. the health care market supply curve to shift upward. D. the health care market demand curve to shift downward.
Economists Novy-Marx and Rauh contend that states are
A. accurately stating their pension liabilities. B. accurately stating the value of their assets but understating the value of their pension liabilities. C. understating the value of both their assets and liabilities. D. accurately stating the value of their assets but overstating the value of their pension liabilities.