Suppose a rise in the price of peaches from $5.50 to $6.50 per bushel decreases the quantity demanded from 12,500 to 11,500 bushels. The price elasticity of demand is
A) 0.5.
B) 1.0.
C) 2.0.
D) 1000.0.
A
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An oligopolist cannot use the MR = MC rule to find its equilibrium output level because
a. oligopolists do not face stable demand curves for their output b. oligopolists do not try to maximize profits in the long run c. it is too difficult to estimate marginal cost d. the rule applies only in perfect competition e. the minimum efficient scale exceeds total quantity demanded
If a farmer charges $10 for a bushel of corn and her total revenue is $50, how many bushels did she sell?
a. 5 b. 40 c. 60 d. 500
Economists believe that people who force themselves to always eat everything on their plate at a restaurant, regardless of how full they might feel, likely do so because:
A. they include the sunk cost of their meals in making their decision. B. they gain negative utility from insulting the chef. C. they overvalue the opportunity costs of their health and time involved with eating food they don't really want. D. they undervalue the true benefit of eating too much.
Keynesians tend to agree that during a depression:
A. governments should not do anything because anything they do will likely make the situation worse. B. decreasing government spending is likely to improve economic conditions. C. increasing taxes is likely to improve economic conditions. D. increasing government spending is likely to improve economic conditions.