If the cross price elasticity of demand for fries with respect to hamburgers equals -1.2, then:
a. a 1% increase in the quantity of hamburgers purchased will lead to a 1.2% increase in the price of fries
b. a 10% increase in the price of a hamburger will lead to a 12% increase in the quantity of fries demanded at a given price.
c. a 1% decrease in the price of a hamburger will lead to a 1.2% increase in the quantity of fries demanded at a given price.
d. a 10% increase in the quantity of hamburgers purchased will lead to a 12% increase in the price of fries.
c
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A flat LM curve implies that
A) an increase in government spending will change output by a relatively small amount. B) a decrease in taxes will change output by a relatively small amount. C) changes in government spending and taxes will have a large multiple effect on output. D) A and B.
At Rick’s Trailer Trove, Rick’s buddy Theodore convinces him to extend production of trailers beyond the current production level in order to gain more producer surplus. This strategy will work if ______.
a. current production exceeds the equilibrium point b. current production is at the equilibrium point c. the cost of the additional output exceeds what the buyers will pay for it d. the cost of the additional output is less than what the buyers will pay for it
As a fishing firm hires its first, second, and third workers, it could find that marginal product actually rises. The reason for this is:
A. diminishing returns have set in. B. the division of labor creates greater productivity. C. less qualified workers are becoming available. D. all workers perform identical tasks.
In a single payer model of healthcare, the government pays for all healthcare. Because patients access healthcare at a zero or low cost, the quantity of healthcare services demanded exceeds the quantity provided
A) Both sentences are false. B) The first sentence is false; the second sentence is correct. C) The first sentence is correct; the second sentence is false. D) Both sentences are correct.