Figure 7-1
depicts a demand curve with a price elasticity that is
a.
perfectly elastic, implying that consumers will purchase as much as can be supplied at the market price.
b.
relatively inelastic, implying that a percent increase in price results in a smaller percent reduction in sales.
c.
unitary, implying that a percent change in price leads to an equal percent change in quantity demanded.
d.
perfectly inelastic, implying that the same amount will be purchased regardless of the price of the good.
c
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A market often characterized by one-on-one bargaining is a(n) ________ market.
A. general B. informal C. formal D. specific
If transaction costs are high, then it is more likely a firm's demand curve is downward sloping
Indicate whether the statement is true or false
If the opportunity cost of producing corn is lower for Ohio than for Iowa, then:
A. Iowa should specialize in corn production. B. Iowa has the comparative advantage in corn production. C. Iowa should export corn to Ohio. D. Ohio has the comparative advantage in corn production.
Refer to Figure 26-4. If the equilibrium quantity of loanable funds is $56 billion and if the rate of inflation is 4 percent, then the equilibrium real interest rate is
a. 6 percent
b. higher than 8 percent
c. lower than 6 percent.
d. between 6 percent and 8 percent