The price elasticity of demand shows
A) the relationship between market price and household income.
B) the proportionate amount by which the quantity demanded changes in response to a proportionate change in price.
C) the quantity demanded at a given price.
D) the proportionate amount by which the price changes in response to a proportionate change in quantity demanded.
B
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Figure 18-1
According to the graph in Figure 18-1, the tax is which of the following?
A. 400 B. 600 C. 1,000 D. 200
Suppose that Acme Widget is currently selling for $100 per share and you own a call option to buy Acme Widget at $75 per share. The intrinsic value of your option is
A) $25. B) $75. C) $100. D) not possible to determine in the absence of information on values of the share price of Acme Widget between now and the expiration date of the call.
The principle of specialization and exchange implies that
a. total production is highest when individuals specialize according to their absolute advantages b. productive inefficiency increases as producers in society specialize c. exchange can only occur when there is specialization in the economy d. gains from specialization will only occur when society is operating at a point along its production possibilities frontier e. total production is highest when individuals specialize according to their comparative advantages
In the short run, the firm should shut down when:
A. price is equal to the average total cost of production. B. price is less than the minimum of the average variable cost of production. C. price is equal to the minimum of the marginal cost of production. D. price is equal to the minimum of the average total cost of production.