In Figure 5.2, at quantities smaller than Q1,
A. total revenue is falling.
B. price elasticity is greater than 1.
C. price and total revenue are directly related.
D. All of these
Answer: B
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The short run in macroeconomics is the period in which
A) prices change significantly. B) the demand curve is vertical. C) no contracts or agreements exist to fix prices. D) demand determines output.
The figure above shows the demand, marginal revenue, and marginal cost curves for Paul's Parrot pillows, a single-price monopoly producer of pillows stuffed with parrot feathers. When Paul maximizes his profit, his total economic profit is
A) $60. B) $405. C) $0. D) $210,000. E) unknown because more information is needed to determine Paul's profit.
A trade surplus exists if export spending is less than import spending
Indicate whether the statement is true or false
Suppose that the elasticity of demand for a product is 0.5 and quantity demanded increases by 20%. What must the percentage decrease in price have been?
A. 0.5% B. 5% C. 10% D. 40%