What is the elasticity of residual supply faced by the USA in the cashew juice market, where the market supply elasticity is 1, the elasticity of demand of the other countries is -2, and the U.S. imports 10% of the world's cashew juice production?
A) 14
B) 20
C) 28
D) 34
C
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The government proposes a tax on imported champagne. Buyers will bear the entire burden of the tax if the
A) demand curve for imported champagne is horizontal. B) demand curve is downward sloping and the supply curve is upward sloping. C) demand curve for imported champagne is vertical. D) supply curve for imported champagne is vertical.
Which of the following best describes the market reaction if a city restricts the number of firms that are allowed to operate in a market?
A) The market supply curve shifts to the left. B) The market demand curve shifts to the left. C) Quantity supplied increases because price increases. D) Price decreases.
In this graph, the MPC is
A. .25.
B. .5.
C. .75.
D. 1.00.
Suppose that a monopolistically competitive market is in its long-run equilibrium. If the market demand curve shifts to the left due to a recession:
A. the number of firms in the market decreases in the short run. B. some firms may earn negative profits in the short run. C. firms' average costs of production decreases as they decrease output levels in the short run. D. None of these