Electricity accounts for almost 20% of the cost of making steel. A 10% increase in electricity prices results in steel firms decreasing production and thereby demanding 5% less electricity. Over many years, technological innovations can change the way steel firms make steel and reduce the industry's energy requirements. This suggests that the steel industry's short-run elasticity of demand for
electricity is probably
A) less than one in absolute terms in the short run.
B) less than its long-run elasticity of demand for electricity.
C) Both A and B above.
D) Neither A nor B above.
C
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A trend is a general tendency for a variable to increase or decrease over time
Indicate whether the statement is true or false
Which of the following is true?
a. Nations achieve high rates of economic growth primarily because of their natural resource endowments. b. Human and physical capital investments are largely irrelevant to economic growth. c. Poor nations grow slowly because they do not have access to modern technology d. A favorable institutional environment will tend to attract more investment in human and physical capital.
If the CPI is 119 in Year X, then it costs _______ in Year X to buy the same market basket that cost _______ in the base period.
A. $100; $119 B. $119; $100 C. $19; $100 D. $100; $19
In general, a nation can enjoy a higher standard of living by ________ than by being self sufficient.
A. increasing its versatility B. taxing imported goods C. avoiding trade with other nations D. specialization and trading