The existence of money in an economy promotes efficiency by
A) facilitating trade, thereby allowing for greater specialization.
B) allowing for the formation of corporations as legal entities.
C) creating incentives to be self-sufficient.
D) creating an equal distribution of income.
A
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The price elasticity of demand for a commodity is determined primarily by the
a. size of the consumer surplus. b. availability of good substitutes for the good. c. incomes of consumers. d. availability of complementary goods.
The price at which the quantity demanded is zero is called the
a. Choke price b. Reserve price c. Exponential price d. Extraction price e. User price
Suppose that in most car collisions between cars of unequal size, the smaller car sustains the most damage and its occupants suffer the most injury. In answering the following question, assume that, on average, smaller cars generate less air pollution than larger cars and that every person in the economy drives at least one car. Suppose the size of all cars increased by 25 percent. Collisions between two cars would cause ________ and air pollution would ________.
A. greater injury; increase B. neither greater nor less injury; increase C. less injury; increase D. neither greater nor less injury; remain the same
A monopolistically competitive firm and a monopoly are similar because
A) each firm can raise its price without losing all of its sales. B) both firms must behave strategically toward other firms in the industry. C) both firms always operate at their point of minimum average total cost. D) each firm has a large number of small competitors. E) both firms will earn zero profits in the long run.