Suppose the price of a product is reduced from $10 to $6 and the quantity demanded increases from 40 to 60 units. From this we can conclude that the price elasticity of demand over this price range is equal to _____
a. 1.2
b. 1.25
c. 0.80
d. 0.20
e. 0.5
b
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How does the demand for any one seller's product in perfect competition compare to the market demand for that product?
A) They are identical. B) The demand for any one seller is proportionally smaller but otherwise identical to the market demand. C) The demand for any one seller's product is perfectly elastic while the market demand curve is downward sloping. D) There is no demand for any one seller's competitively sold product. E) The demand for any one seller's product is not perfectly elastic while the market demand is perfectly elastic.
Refer to the scenario above. Which of the following statements will hold true if the starting bid is $300?
A) Everyone except Bob will take part in the auction. B) Everyone will take part in the auction. C) Only Bob will take part in the auction. D) Everyone except Joe will take part in the auction.
An increase in unemployment benefits is likely to: a. reduce a person's incentive to look for work
b. reduce the opportunity cost of remaining employed. c. provide a better safety net for employed families. d. decrease the tax imposed on consumers. e. increase the need to accept the first job available after becoming unemployed.
The notion that equally situated individuals should be taxed equally is referred to as
a. horizontal equity. b. vertical equity. c. the benefits principle. d. the Gini principle.