If the price elasticity of demand for a good is 0.4, then which of the following events is consistent with a 2 percent decrease in the quantity of the good demanded?
a. a 0.8 percent increase in the price of the good
b. a 2.4 percent increase in the price of the good
c. a 5 percent increase in the price of the good
d. a 8 percent increase in the price of the good
c
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If the absolute value of the price elasticity of demand for aspirin equals 0.8 then
A) aspirin has few substitutes. B) the demand for aspirin is elastic. C) the demand for aspirin is inelastic. D) aspirin is a normal good.
Which of the following is true of marginal product?
a. The firm should produce where marginal product is greatest. b. The firm should produce where marginal product is increasing. c. When marginal product is falling, total product is falling. d. The firm should produce where marginal product is zero. e. When marginal product is increasing, total product is increasing by increasing amounts.
When considering the definition of "monopolistic competition," it is wise to place emphasis upon the first word as it most nearly describes market performance within this industry structure
Indicate whether the statement is true or false
Suppose the government of a country starts a system designed to ensure that depositors in a bank do not lose their money, even if the bank goes bankrupt. Banks will have to pay a premium to a Central Deposit Assurance Corp, ensuring that depositors do not lose their deposits. Which of the following is likely to be true in such a situation? a. Safer banks, with a higher net worth, would pay a
lower premium, while riskier banks, with a lower net worth, would pay a higher premium. b. Banks with a high net worth would pay a high premium, while banks with a low net worth would pay a low premium. c. The incidence of bank runs would increase. d. The willingness of banks to make loans would decrease.