Which of the following is NOT an assumption of the classical model?
A) Wages and prices are flexible.
B) People are motivated by self-interest.
C) Money illusion exists.
D) Pure competition exists.
C
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Which of the following statements about the elasticity of demand for a monopolist is TRUE?
A) Since a monopolist produces a good with no close substitutes, the price elasticity of demand for the good is zero. B) A monopolist produces a good with demand that is perfectly inelastic because people can not do without the good. C) Since every good has some substitute, even if imperfect, the demand for a good produced by a monopolist will not have zero price elasticity. D) Since the demand curve of a monopolist is downward sloping, the demand for the good must be inelastic.
The demand for money curve shows that there is an inverse relationship between the quantity of money demanded and the:
a. quantity of money supplied. b. gross domestic product (GDP). c. price level. d. interest rate.
____ occur when an X percent increase in input use raises output by more than X percent, so that the more the firm produces, the lower its per-unit costs become
a. Economies of scope b. Scale economies c. Product differentiation d. Perfect competition
The economy can operate
A) beyond its institutional PPF but not beyond its physical PPF. B) on both its institutional PPF and its physical PPF, but not at the same time. C) under its physical PPF but not under its institutional PPF. D) a and b E) a, b, and c