One of the most important determinants of a good's price elasticity of demand is
A. the cost of producing the good.
B. the profits of suppliers.
C. the ease with which consumers can substitute other goods for that product.
D. the numbers of buyers in the market.
Answer: C
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Suppose you solve a consumer's constrained 2-good optimization problem for a given economic environment --- and your answer contains a negative consumption level of good 2. Which of the following is a valid conclusion on your part:
A. The true optimum has the consumer consume none of good 1. B. The true optimum has the consumer consume none of good 2. C. There are multiple "true" optimal consumption bundles. D. The consumer will sell good 2. E. None of the above.
Which of the goals pursued by policymakers in an open economy is desirable because can help reduce the volatility of economic activity?
A) exchange-rate stability B) monetary policy independence C) free capital flows D) appreciation of the domestic currency
In the multiple regression model, the least squares estimator is derived by
A) minimizing the sum of squared prediction mistakes. B) setting the sum of squared errors equal to zero. C) minimizing the absolute difference of the residuals. D) forcing the smallest distance between the actual and fitted values.
It has been shown that when offered higher wages, women will work more hours. This is because
a. women tend to work more hours than men at any wage rate. b. the substitution effect is more dominant for women. c. the income effect is more dominant for women. d. women are more productive than men at higher wages.