A perfectly inelastic demand curve:
A. has a price elasticity coefficient greater than unity.
B. has a price elasticity coefficient of unity throughout.
C. graphs as a line parallel to the vertical axis.
D. graphs as a line parallel to the horizontal axis.
Answer: C
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Firms in monopolistic competition can achieve product differentiation by
A) expanding plant size. B) exploiting economies of scale in production. C) advertising special characteristics. D) setting the price equal to average revenue.
Dividends
A) raise after tax net income. B) are not tax deductible. C) are tax deductible. D) have the same tax treatment for the firm as the tax treatment of interest payments.
A country has I = $200 billion, S = $400 billion, and purchased $600 billion of foreign assets, how many of its assets did foreigners purchase?
a. $0 b. $200 billion c. $400 billion d. $800 billion
Refer to the information provided in Figure 12.4 below to answer the question(s) that follow.
Figure 12.4There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of S0 and D0.Refer to Figure 12.4. Assume consumer preference changes toward X and away from Y. Ceteris paribus, the equilibrium quantity of X will ________ and the equilibrium quantity of Y will ________.
A. decrease; increase B. increase; increase C. increase; decrease D. decrease; decrease