The price elasticity of demand measures
A) changes in demand.
B) how responsive market prices are to a change in demand.
C) how responsive consumers are to a change in price.
D) how responsive consumers are to a change in income.
Answer: C
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Answer the following statement(s) true (T) or false (F)
1. The short run is any period of time less than one year, while the long run refers to a period of time one year or more in length. 2. The production function describes how much output a firm can generate for various cost levels. 3. Marginal and average products can be plotted in the same graph as total product costs. 4. In deriving the marginal product of labor, we consider the increase in output of an additional worker using additional capital. 5. In order to compute the total cost of production when labor is the only variable, we need only need to know the quantities of labor and the current wage rate.
A sufficient measure of the effectiveness of government redistribution is to look at the overall level of taxpayer dollars spent on redistributive activities
a. True b. False
In the market for euros, an increase in U.S. imports from Europe tends to
A. cause no change in equilibrium price. B. increase equilibrium price. C. decrease equilibrium price. D. increase excess supply.
The above figure shows the demand and cost curves for a monopolistically competitive firm in the long run. The firm has excess capacity of
A) 4 units. B) 8 units. C) 16 units. D) $10.