If an increase in the price of a product from $1 to $2 per unit leads to a decrease in the quantity demanded from 100 to 80 units, then the value of price elasticity of demand is
a. -1/3
b. -2 1/3
c. -1/4
d. -3
e. -2/3
A
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Distinguish between a perfectly competitive firm and a monopolistically competitive firm on the basis of the long-run equilibrium price
What will be an ideal response?
When considering setting the transfer price at the market price of a product similar to the intermediate good that is already available on the market
a. It is appropriate to ignore that the market price includes a margin above marginal cost b. Consider whether the product on the market includes costly features your downstream division does not use c. it is OK if the product on the market is inexpensive because its quality is lower than you use d. if it is similar enough, it is justification for you producing it in-house
You operate a shop that repairs TVs and VCRs. The going wage rate in a competitive market for skilled repair people is $18 per hour. Given the current demand for your services, the marginal revenue product of your repair people is $28 per hour. You should
A. increase the number of repair people working for you. B. decrease the number of repair people working for you. C. make no change in the number of people you use. D. lay off all your employees and do all the work yourself.
An analysis of the American economy since 1960 shows that there is a stable relationship between inflation and unemployment
A. only in the short run. B. only in the long run. C. in neither the short run nor the long run. D. in both the short run and the long run.