A firm could lower prices and still increase revenue if
A. elasticity of demand is equal to zero.
B. demand is elastic.
C. elasticity of demand is equal to unity.
D. demand is inelastic.
Answer: B
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Assume someone organizes all farms in the nation into a single-price monopoly. As a result, the amount of food produced
A) remains constant. B) decreases. C) increases. D) might increase or decrease depending on whether the demand for food is elastic or inelastic. E) might increase or decrease depending on whether the monopoly's marginal revenue curve lies below or above its demand curve.
Economic efficiency occurs when the firm produces a given output
A) by using the least amount of inputs. B) by using the maximum amount of inputs. C) at the least cost. D) at the greatest cost.
Income inequality is indicated by a Lorenz curve that:
a. bows up, away from the line of income equality. b. bows down, away from the line of income equality. c. lies parallel to the line of income equality. d. coincides with the line of income equality. e. approaches the vertical axis.
The use of theory and observation is more difficult in economics than in sciences such as physics due to the difficulty in
a. performing an experiment in an economic system. b. applying mathematical methods to economic analysis. c. analyzing available data. d. formulating theories about economic events.