A price elasticity of demand of 2.3 implies
a. Demand is inelastic
b. Demand is elastic
c. Demand is unitary elastic
d. Demand is perfectly elastic
b
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In the long-run, a firm in monopolistic competition produces at an output level where
A) P > ATC and MR = MC. B) P > ATC and MR > MC. C) P = ATC and MR = MC. D) P = ATC and MR > MC. E) P = ATC and MC = ATC.
If net exports are equal to net foreign investment, which of the following is not true?
A) The balance on the financial account is zero. B) The current account balance is equal to the negative of the financial account balance. C) Net capital inflows are equal to imports minus exports. D) The balance of payments is zero.
Briefly and concisely define the following concepts and terms.
a. marginal social cost b. detrimental externalities c. free-rider problem d. cost disease e. “defective telescopic faculty”
Based on the graph showing an increase in the growth of the money supply, if the economy maintains a 6 percent inflation rate for a fairly long time, people’s expectations will adjust and move the economy from ______.
a. point B to point A
b. point B to point C
c. point C to point A
d. point C to point B