The Price Elasticity of Demand is a negative number this means:
a) Demand is price elastic.
b) Demand is price inelastic.
c) The demand curve is downward sloping.
d) An increase in income will reduce the quantity demanded.
Ans: c) The demand curve is downward sloping.
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Elasticity along a demand curve:
A. is constant if the demand curve is linear. B. changes only when the demand curve is bowed out. C. changes when the demand curve is linear. D. changes only when the demand curve is bowed in.
Marti wanted to replenish her wardrobe and went to the $30 rack at K-Mart. There she saw three stylish dresses. She was delighted because she would have been willing to pay $40 for the first dress, $35 for the second dress, and $30 for the third dress. She bought all three. Which of the following is correct?
a. Only the third dress sold for its price. b. The consumer surplus she derived was $90. c. The consumer surplus she derived was $105. d. The consumer surplus she derived was $15. e. The consumer surplus she derived was zero because, for the third, price was exactly what she was willing to pay.
Explain why environmental damage would be classified as an externality
If a cartel is successful
A. the firms will act like a monopoly. B. the firms will lose profits in a perfectly competitive market. C. the consumers will pay lower prices. D. the consumers will have more goods and services to choose from.