Suppose that the price elasticity of demand for bagels is 1.60, a 10% increase in price will decrease the quantity demanded by 6%.
Answer the following statement true (T) or false (F)
False
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When the price of a product is increased 15%, the quantity demanded decreases 10%. We can therefore conclude that the demand for this product is
A. cross-elastic. B. unitary elastic. C. inelastic. D. elastic.
Which of the following are examples of a firm experiencing a positive technological change?
a. A firm is able to reduce its inputs by 15 percent and still produce the same level of output. b. A seminar attended by the firm's workers makes them more productive. c. A firm adds 5 percent to its workforce and is able to maintain its initial level of output. d. A firm restructures its distribution system and is able to save on its shipping times. e. A firm rearranges its warehouse and finds that it can use fewer workers to maintain its productivity level.
To correct for market failure, the government could impose a tax on the producer
Indicate whether the statement is true or false
Compare two economies A and B that start out with identical production possibilities curves. Economy A chooses an efficient point with 6 consumption goods and 3 capital goods, while economy B also chooses an efficient point, but with 4 consumption goods and 5 capital goods. In the future we can predict:
A. economy A will operate inefficiently. B. economy B will operate inefficiently. C. economy A and economy B will grow equally fast. D. economy B will grow faster than economy A.