The absolute value of the elasticity of demand for a "necessity" good with few close substitutes is:
a. Equal to 0.
b. Less than 1.
c. Greater than 1.
d. Equal to 1.
Ans: b. Less than 1.
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When compared with a perfectly competitive market with identical costs of production, a pure monopoly will produce ________.
A. more output and charge the same price B. less output and charge the same price C. less output and charge a higher price D. more output and charge a higher price
A price floor that is binding:
A. must be set above the equilibrium price, and will likely cause a shortage. B. must be set below the equilibrium price, and will likely cause a shortage. C. must be set above the equilibrium price, and will likely cause a surplus. D. must be set below the equilibrium price, and will likely cause a surplus.
The economic theory of discrimination suggests that the practice of apartheid in South Africa should have
A. worsened the economic condition of only the blacks. B. worsened the economic condition of only the whites. C. worsened the economic condition of blacks, whites, and others. D. improved the economic condition of the whites.
Because of scarcity,
A.) choices must be made. B.) there are not enough goods and services to satisfy everyone. C.) there are plenty of goods to go around. D.) Both A and B are true.