We say that a good has elastic demand whenever the absolute value of the price elasticity of demand is greater than 1. A 1 percent change in price therefore causes
A) exactly a 1 percent change in the quantity demanded.
B) a change of less than 1 percent in the quantity demanded.
C) a greater than 1 percent change in quantity demanded.
D) a change that cannot be determined based on 1 percent.
C
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The figure above provides information about Light-U-Up Utilities, which is a natural monopoly that provides electricity. What is the area of deadweight loss when Light-U-Up produces the unregulated, profit-maximizing level of output?
A) abd B) acg C) deg D) There is no deadweight loss.
According to the law of diminishing returns, if population grows, but the amount of available resources stays the same, output will ______.
a. fall at an inverse rate b. stay the same c. rise, but by ever shrinking amounts d. rise at a steady rate
Since 1980, most nation shave increased tariff rates.
Answer the following statement true (T) or false (F)
The rate of interest charged to commercial banks by the Fed for loans is called the ________ rate
A) discount B) commercial paper C) federal funds D) prime