In Figure 5.2, at quantities larger than Q1 demand is:
A. inferior.
B. elastic.
C. inelastic.
D. unit elastic.
Answer: C
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When the government chooses to use resources to build a dam, these sources are no longer available to build a highway. This choice illustrates the concept of
A) a market mechanism. B) macroeconomics. C) opportunity cost. D) a fallacy of composition.
Trade can be beneficial to an economy because:
A) it results in a more efficient use of the combined resources of some of the trading countries, even though it reduces efficiency in others. B) more goods and services can be obtained at lower opportunity cost. C) it prevents specialization in those activities in which countries have a comparative advantage. D) It prevents unemployment.
Which form of returns to specialization means that the units of resources required to produce one unit are assumed to remain the same no matter where a country is on the production possibilities frontier?
What will be an ideal response?
The Herfindahl-Hirschman index is a measure of
A) the profit margin of an industry. B) market size. C) the degree of collusion among firms in a market. D) the degree of concentration among firms in a market.