When many substitutes exist for a good, demand will be
A) elastic.
B) unit-elastic.
C) inelastic.
D) perfectly unit-elastic.
Answer: A
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Which statement below is true for a price taker in the long run?
A) Net revenue can only be positive. B) Net revenue can only be negative. C) Net revenue can only be zero. D) Net revenue can be positive, negative, or zero.
Compared to an electronic payments system, a payments system based on checks has the major drawback that
A) checks are less costly to process. B) checks take longer to process, meaning that it may take several days before the depositor can get her cash. C) fraud may be more difficult to commit when paper receipts are eliminated. D) legal liability is more clearly defined.
Which of the following could explain a fall over time in the price of the depletable resource aloe?
a. The productivity of aloe mines fell. b. New deposits of aloe were discovered. c. Demand for aloe increased over time. d. All of the above are correct.
Which of the following statements is not valid when supply is perfectly elastic?
a. The elasticity of supply approaches infinity. b. The supply curve is horizontal. c. Very small changes in price lead to very large changes in quantity supplied. d. The time period under consideration is more likely a short period rather than a long period.