A monopoly sets a price of $50 per unit for an item that has a marginal cost of $10. Assuming profit maximization, the implicit demand elasticity is
A) -0.2.
B) -0.8.
C) -1.25.
D) -5.0.
C
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If the demand for a steak is unit elastic, then
A) the percentage change in quantity demanded is 100 percent greater than the percentage change in price (in absolute value). B) quantity demanded does not respond to changes in price. C) the percentage change in quantity demanded is equal to the percentage change in price. D) the percentage change in quantity demanded is 1 percent greater than the percentage change in price.
Utility refers to the:
a. relationship of demand to the supply of a product. b. satisfaction a consumer experiences after a good or service is purchased. c. satisfaction a consumer expects to receive from a good or service. d. ability of a good or a service to have value in the marketplace. e. usefulness of the product consumed.
If the money supply in the economy were at MS2, and the Federal Reserve Bank used open market operations to move money supply to MS1 the overall result in the economy would be:
A. Aggregate demand shifted in, causing GDP to fall. B. LRAS move to the FE level of output. C. Aggregate demand shifted out, causing GDP to rise D. Aggregate supply shifted in, causing GDP to fall.
Which of the following statements is not correct regarding taxes?
A. The largest source of state and local governments tax revenue is sales and excise taxes. B. The largest source of federal government tax revenue is individual income taxes. C. A sales tax on food is a regressive tax. D. A proportional tax is equal to a fixed dollar amount.