A firm with a highly inelastic demand for coal will:
A. cut consumption less than a firm with a highly elastic demand when price goes up.
B. refuse to cut consumption for any reason.
C. stop using coal entirely if a tax is imposed.
D. cut consumption more than a firm with a highly elastic demand when price goes up.
Answer: A
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The aggregate demand curve will shift to the left if
A) government expenditures increase. B) people are more optimistic about their future. C) the nation's exports decrease. D) a reduction in the price level pushes down borrowing costs.
If there is a(n) __________ in reserves, the potential change in demand deposits is __________
A) deficiency; 0 B) deficiency; positive C) deficiency; negative D) excess; negative
An example of moral hazard is
a. people drive as carefully in icy conditions with antilock brakes as without b. people drive as safely with more airbags as without c. football players avoid 'spearing' with their heads even with safer helmets d. people fail to read the medicine warnings more often when self-medicating versus with a doctor's prescription
In the long run, a monopolistically competitive firm will:
a. produce more than a perfectly competitive firm. b. suffer an economic loss. c. earn positive economic profit. d. produce less than a perfectly competitive firm.