Suppose a decrease in supply raises the price from $4.00 to $5.50 and decreases the quantity demanded from 2,000 to 1,500. Using the midpoint method, the elasticity of demand equals
A) 2.10.
B) 1.11.
C) 0.90.
D) 0.72.
E) None of the above answers is correct.
C
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A) does not change; rightward B) increases; rightward C) decreases; leftward D) decreases; rightward E) increases; leftward
Encouraging formation of monopolies provides firms an incentive to:
A) innovate. B) increase social surplus. C) hire less resources in production. D) decrease deadweight loss.
Which of the following can shift the labor demand curve to the right?
a. Decrease in product price. b. Increase in wages. c. Decrease in wages. d. Decrease in the MP. e. Increase in productivity.
Productivity in manufacturing sectors has risen faster than in service sectors
a. True b. False Indicate whether the statement is true or false