Refer to the accompanying figure. Assume the slopes of the two demand curves are the same. Let eA denote the price elasticity of demand at point A, and let eB denote the price elasticity of demand at point B.
Which of the following statements is correct?
A. eA = eB
B. eA < eB
C. eA ÷ eB < 0
D. eA > eB
Answer: D
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U.S. imports of sugar are limited by an import quota that, according to a study updated in 2013, imposed a total cost on American consumers close to $________, or an average cost of ________ per year for every man, woman, and child in the country
A) $3 billion; $10 B) $105 million; $3 C) $2 billion; $110 D) $3 billion; $2,000 E) $370 million; $2,000
Economies of scale act as a barrier to entry because
a. one large firm can supply the market at a higher average cost than many small firms could b. firms are not allowed by law to sell output below average cost c. large firms can hire inputs at a higher price than smaller firms could d. firms will not compete with a larger firm when there are differences in marginal cost e. one large firm can produce the market output at a lower average cost than many small firms
Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and reserve-related (central bank) transactions become more negative (or less positive). b. The GDP Price Index and reserve-related (central bank) transactions remain the same. c. The GDP Price Index falls, and reserve-related (central bank) transactions remain the same. d. The GDP Price Index rises, and reserve-related (central bank) transactions become more positive (or less negative). e. The GDP Price Index rises, and reserve-related (central bank) transactions remain the same.
According to supply-side economists, what impact do mandatory benefits have?
A. They increase payroll costs and shift AS to the left. B. They reduce payroll costs and shift AS to the right. C. They increase payroll costs and shift AS to the right. D. They reduce payroll costs and shift AS to the left.