The price elasticity of demand for Kellogg's Raisin Bran is larger in absolute value than the price elasticity of demand for all breakfast cereals
Indicate whether the statement is true or false
TRUE
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The amount by which people will increase or decrease their purchases when prices change
A) is typically greater in the case of luxuries than in the case of necessities. B) is typically less for business firms than for households because business firms can more easily borrow to maintain purchasing patterns. C) is typically less for business firms than for households because business firms must have certain goods to remain in operation. D) tends to be greater over longer periods of time because it takes time to invent and to discover substitutes. E) will be approximately zero unless the demand also changes.
Refer to Figure 12-5. If the market price is $20, what is the average profit at the profit-maximizing quantity?
A) $5 B) $6 C) $9 D) $20
If some industries exhibit internal increasing returns to scale in each country, we should not expect to see
A) perfect competition in these industries. B) intra-industry trade between countries. C) inter-industry trade between countries. D) high levels of specialization in both countries. E) increased productivity in both countries.
Cost minimization suggests that two inputs should be employed to the point where
A) the marginal cost of each input is identical. B) the marginal revenue product of each input is identical. C) the marginal physical product per dollar spent on each input is identical. D) the extra contribution to physical output of the inputs is identical.