If the price elasticity of demand for a good is 5.0, then a 10 percent increase in price results in a
a. 0.5 percent decrease in the quantity demanded.
b. 2.5 percent decrease in the quantity demanded.
c. 5 percent decrease in the quantity demanded.
d. 50 percent decrease in the quantity demanded.
d
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If the firm’s marginal physical product is 8, and its handicrafts sell for $70, when a unit of labor costs $150, the firm is operating
A. short of an optimal input point. B. at the optimum input point. C. beyond the optimum input point. D. There isn’t enough information to determine if the input point is optimal.
When a country allows trade and becomes an importer of coal,
a. the losses of the domestic producers of coal exceed the gains of the domestic consumers of coal. b. the losses of the domestic consumers of coal exceed the gains of the domestic producers of coal. c. the gains of the domestic producers of coal exceed the losses of the domestic consumers of coal. d. the gains of the domestic consumers of coal exceed the losses of the domestic producers of coal.
A study of the per capita consumption of gasoline: in 10 countries demonstrates that:
A. the consumption of gasoline does not appear to be related to the price of gasoline. B. higher gasoline prices reduce consumption in some of those countries, but not in others. C. higher gasoline prices do result in lower consumption of gasoline. D. higher gasoline prices actually increase the consumption of gasoline.
Refer to the above figure. Production at Point E
A. would indicate production at a level below that which is attainable. B. would demonstrate a total lack of technical expertise. C. would indicate that this economy is producing beyond its capabilities. D. is not attainable with given resources and technology.