Suppose the price elasticity of supply for crude oil is 2.5. How much would price have to rise to increase production by 20 percent?
A. 8 percent
B. 12.5 percent
C. 20 percent
D. 45 percent
A. 8 percent
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Which of the following represents dead capital?
A) capital that lacks clear title of ownership B) capital that has worn out over time C) capital that has become obsolete D) none of the above
Cartels rarely succeed for long because they find it difficult to
A) avoid losing the advantages from economics of scale. B) keep marginal costs high and marginal revenue low. C) keep members from offering discounts and new firms from entering. D) keep members from reducing output below the optimal level. E) prevent average cost from falling below marginal cost.
When a firm has decreasing average costs over the entire range of market demand it is:
A. a natural monopoly. B. an oligopoly. C. rent seeking. D. in a contestable market.
A U.S. importer purchases 5,000 British pounds for $10,000. The rate of exchange is
A. $1 = 1. B. $1 = 2. C. $1 = .5. D. $2 = 1.