Give an example of a product that would have a small price elasticity of supply, and explain why
What will be an ideal response?
Answer: Small price elasticity means inelastic (a.k.a. "inflexible") production levels. mostly, this would happen if a product had difficult ingredients to acquire. one example would be "Game of Thrones novels" - George R.R. Martin's time is limited, and even for large amounts of money he will (apparently) not write books any faster
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Robinson Crusoe divides his time between catching fish and gathering fruit. Part of his production possibilities frontier is given in the above table
If Mr. Crusoe is on his PPF and he increases the amount of fruit he gathers from 56 to 90 pounds, the opportunity cost is A) 37 pounds of fish. B) 31 pounds of fish. C) 17 pounds of fish. D) 34 pounds of fruit. E) 90 pounds of fruit.
For a monopolistically competitive firm, marginal revenue
A) and price are unrelated. B) is less than the price. C) is greater than the price. D) equals the price.
In a large open economy,
A) domestic lending and borrowing decisions have no impact on the world real interest rate. B) an increase in the domestic supply of loanable funds would lower the world real interest rate. C) the domestic equilibrium real interest rate is determined independently of foreign borrowing and lending. D) an increase in the domestic demand for loanable funds would lower the world real interest rate.
One productivity standard for income distribution stated in the text is
A) income distribution should be based on contribution to society's total output. B) tax payments are higher for higher income people. C) poor people pay too much in taxes. D) the poor should contribute more to society.